<PAGE>   1
                                                                    EXHIBIT 10.5

                                  OFFICE LEASE


                                 (MULTI-TENANT)


             for 2151 Salvio Street, Suite 325, Concord, California


                                     between


                           SALVIO PACHECO SQUARE, LLC,
                     a California limited liability company



                                   as Landlord


                                       and



                                JCM Partners, LLC


                                    as Tenant

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                                TABLE OF CONTENTS

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                                                                                 PAGE
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1.      BASIC LEASE INFORMATION....................................................1

        1.1    Building............................................................1

        1.2    Premises............................................................1

        1.3    Common Area.........................................................1

        1.4    Commencement Date...................................................1

        1.5    Expiration Date.....................................................1

        1.6    Term................................................................1

        1.7    Rent Commencement Date..............................................1

        1.8    Base Rent...........................................................1

        1.9    Not Used............................................................2

        1.10   Not Used............................................................2

        1.11   Not used............................................................2

        1.12   Base Year for Taxes.................................................2

        1.13   Base Year for Operating Expenses....................................2

        1.14   Tenant's Proportionate Share........................................2

        1.15   Use.................................................................2

        1.16   Landlord's Address for Notice.......................................2

        1.17   Rent Payment Address................................................2

        1.18   Tenant's Address for Notice.........................................2

        1.19   Listing and Leasing Agents..........................................2

        1.20   Parking.............................................................2

        1.21   Security Deposit....................................................2

        1.22   Guarantor...........................................................2

        1.23   Exhibits and Addenda................................................3

2.      LEASE OF PREMISES..........................................................3

3.      DELIVERY OF POSSESSION.....................................................3

4.      RENT.......................................................................4

        4.1    Payment of Rent.....................................................4

        4.2    Not Used............................................................4

        4.3    Late Charges........................................................4

        4.4    Additional Rent for Taxes and Operating Expenses....................4

        4.5    Taxes on Tenant's Use and Occupancy.................................7

5.      SECURITY DEPOSIT...........................................................7

6.      TENANT'S USE OF THE PREMISES...............................................8

        6.1    Use.................................................................8

        6.2    Observance of Law...................................................8

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        6.3    Insurance...........................................................8

        6.4    Nuisance and Waste..................................................8

        6.5    Load and Equipment Limits...........................................8

        6.6    Hazardous Material..................................................9

7.      SERVICES AND UTILITIES....................................................10

8.      REPAIRS AND MAINTENANCE...................................................11

        8.1    Landlord's Obligations.............................................11

        8.2    Tenant's Obligations...............................................11

        8.3    Landlord's Liability...............................................11

9.      CONSTRUCTION; ALTERATIONS; LEASEHOLD IMPROVEMENTS; AND TENANT'S PROPERTY..11

        9.1    Landlord's Construction Obligations................................11

        9.2    Tenant's Construction Obligations..................................11

        9.3    Tenant Alterations.................................................12

        9.4    Liens..............................................................12

        9.5    Leasehold Improvements.............................................12

        9.6    Tenant's Property..................................................12

10.     INDEMNIFICATION...........................................................13

        10.1   Tenant Indemnification.............................................13

        10.2   Landlord Not Liable................................................13

11.     TENANT'S INSURANCE........................................................13

        11.1   Insurance Requirement..............................................13

        11.2   Minimum Scope of Coverage..........................................14

        11.3   Minimum Limits of Insurance........................................14

        11.4   Deductible and Self-Insured Retention..............................14

        11.5   Increases in Insurance Policy Limits...............................14

        11.6   Waiver of Subrogation..............................................14

        11.7   Landlord's Right to Obtain Insurance for Tenant....................15

12.     DAMAGE OR DESTRUCTION.....................................................15

        12.1   Damage.............................................................15

        12.2   Damage During Last Twelve Months of Term...........................15

        12.3   Repair of Premises in Excess of One Hundred Eighty Days............15

        12.4   Tenant Repair......................................................15

        12.5   Express Agreement..................................................15

13.     EMINENT DOMAIN............................................................15

        13.1   Whole Taking.......................................................16

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        13.2   Partial Taking.....................................................16

        13.3   Proceeds...........................................................16

        13.4   Landlord's Restoration.............................................16

14.     ASSIGNMENT AND SUBLETTING.................................................16

        14.1   No Assignment or Subletting........................................16

        14.2   Landlord's Consent.................................................17

15.     DEFAULT...................................................................19

        15.1   Tenant's Default...................................................19

        15.2   Landlord Remedies..................................................20

        15.3   Landlord's Right to Cure Tenant's Default..........................20

        15.4   Mortgagee Protection...............................................20

16.     WAIVER....................................................................20

17.     SUBORDINATION AND ATTORNMENT..............................................21

18.     TENANT ESTOPPEL CERTIFICATES..............................................21

        18.1   Landlord Request for Estoppel Certificate..........................21

        18.2   Failure to Execute.................................................21

19.     NOTICE....................................................................21

20.     TRANSFER OF LANDLORD'S INTEREST...........................................22

21.     SURRENDER OF PREMISES.....................................................22

        21.1   Clean and Same Condition...........................................22

        21.2   Property Abandoned.................................................22

22.     HOLDING OVER..............................................................22

        22.1   Holding Over with Landlord's Permission............................22

        22.2   Holding Over without Landlord's Permission.........................22

23.     RULES AND REGULATIONS.....................................................22

24.     CERTAIN RIGHTS RESERVED BY LANDLORD.......................................23

25.     ADVERTISEMENTS AND SIGNS..................................................23

26.     RELOCATION OF PREMISES....................................................23

27.     FORCE MAJEURE.............................................................24

28.     BROKERAGE FEES............................................................24

29.     QUIET ENJOYMENT...........................................................24

30.     PARKING...................................................................24

31.     MISCELLANEOUS.............................................................24

        31.1   Landlord's Liability...............................................24

        31.2   Accord and Satisfaction; Allocation of Payments....................24

        31.3   Attorneys' Fees....................................................25

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        31.4   Captions and Section Numbers.......................................25

        31.5   Changes Requested by Lender........................................25

        31.6   Choice of Law......................................................25

        31.7   Consent............................................................25

        31.8   Authority..........................................................25

        31.9   Waiver of Right to Jury Trial......................................25

        31.10  Counterparts.......................................................25

        31.11  Execution of Lease; No Option......................................25

        31.12  Furnishing of Financial Statements; Tenant's Representations.......26

        31.13  Further Assurances.................................................26

        31.14  Prior Agreements; Amendments.......................................26

        31.15  Recording..........................................................26

        31.16  Severability.......................................................26

        31.17  Successors and Assigns.............................................26

        31.18  Time Is of the Essence.............................................26

        31.19  Multiple Parties...................................................26

32. MISCELLANEOUS.................................................................26

        32.1   Option to Renew....................................................26

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                                      -iv-

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                                      LEASE

        This Lease ("Lease") by and between SALVIO PACHECO SQUARE, LLC, a
California limited liability company ("Landlord"), and JCM Partners, LLC, a
Delaware limited liability company ("Tenant"), is dated for reference purposes
only as of this 20th day of February, 2001.

        1. BASIC LEASE INFORMATION. The following is a summary of basic lease
information. Each term or matter in this Section 1 shall be deemed to
incorporate all of the terms set forth hereinbelow pertaining to such matter or
item and to the extent there is any conflict between the provisions of this
Section 1 and any more specific provision of this Lease, such more specific
provision shall control.

           1.1 Building. The building of which the Premises are a part (the
"Building") located at 2151 Salvio Street, Concord, California 94520, containing
approximately 120,000 square feet of rentable area (as may be adjusted pursuant
to Section 1.2 below), and more particularly described on Exhibit "B" attached
hereto (the "Real Property").

           1.2 Premises. That portion of the third floor of the Building,
commonly referred to as Suite 325, as shown by diagonal lines on Exhibit "A"
attached hereto. For purposes of this Lease, the Premises is deemed to contain
approximately 7,533 square feet of rentable area. If the Premises include one or
more floors in their entirety, all corridors and restroom facilities located on
such full floor(s) shall be considered part of the Premises.

           1.3 Common Area. The Building lobbies, common corridors and hallways,
restrooms, parking areas and other areas of the Building that are generally
understood to be public or common areas; provided, however, corridors and
restrooms on an individual floor shall be included within a tenant's premises
(and not Common Area) for a full floor tenant.

           1.4 Commencement Date. (Section 3.1): The term of the Lease shall
commence upon Landlord's delivery of the Premises to Tenant, which date is
estimated to be March 1, 2001. Promptly after determination of the Commencement
Date, Landlord and Tenant shall enter into the Notice of Commencement Date in
the form attached hereto as Exhibit "C".

           1.5 Expiration Date. (Section 3.1): February 28, 2006, unless
otherwise sooner terminated in accordance with the provisions of this Lease.

           1.6 Term. A period of five (5) years, which shall commence on the
Commencement Date and expire at midnight on the Expiration Date.

           1.7 Rent Commencement Date. (Section 4.1.1): March 1, 2001.

           1.8    Base Rent. (Section 4.1.1):

<TABLE>
<CAPTION>
                   Lease                    Total Annual            Monthly
                   Years                     Base Rent           Installments
                   -----                    ------------         ------------
               <S>                         <C>                   <C>
              Lease Year 0 to 1            $176,272.20            $14,689.35
                                           ($1.95 per
                                           rentable square
                                           foot)


              Lease Year 1 to 2            $180,792.00            $15,066.00
                                           ($2.00 per
                                           rentable square
                                           foot)

</TABLE>

                                       1
<PAGE>   7


<TABLE>
               <S>                         <C>                   <C>
              Lease Year 2 to 3            $185,311.80            $15,442.65
                                           ($2.05 per
                                           rentable square
                                           foot)

              Lease Year 3 to 4            $189,831.60            $15,819.30
                                           ($2.10 per
                                           rentable square
                                           foot)

              Lease Year 4 to 5            $194,351.40            $16,195.95
                                           $2.15 per
                                           rentable square
                                           foot)
</TABLE>

           1.9  NOT USED

           1.10 NOT USED

           1.11 NOT USED

           1.12 Base Year for Taxes. (Section 4.4.3.1): 2001.

           1.13 Base Year for Operating Expenses. (Section 4.4.3.1): 2001.

           1.14 Tenant's Proportionate Share. (Section 4.4.3.1): 6.27 percent
(6.27%). Such share is a fraction, the numerator of which is the rentable square
feet of the Premises, and the denominator of which is the rentable square feet
of the Building, as determined by Landlord from time to time on a consistent
basis.

           1.15 Use. (Section 6): General office purposes.

           1.16 Landlord's Address for Notice. (Section 19):

                  Salvio Pacheco Square, LLC
                  2151 Salvio Street, Suite 325
                  Concord, California  94520

           1.17 Rent Payment Address . (Section 4.1.1):

                  Salvio Pacheco Square, LLC
                  P. O. Box 3000
                  Concord, California  94522-3000

           1.18 Tenant's Address for Notice. (Section 19):

                JCM Partners, LLC
                2151 Salvio Street, #325
                Concord, CA  94520

           1.19 Listing and Leasing Agents. (Section 28): None.

           1.20 Parking. (Section 30): Tenant may park in the public parking
garage on Salvio Street, which is currently free of charge.

           1.21 Security Deposit. (Section 5): $16,195.95.

           1.22 Guarantor. (Section 31.20): None.


                                       2
<PAGE>   8

           1.23 Exhibits and Addenda. The exhibits and addenda listed below are
attached hereto and incorporated by reference in this Lease:

                Exhibit A - Floor Plan showing the Premises.

                Exhibit B - Description of Real Property.

                Exhibit C - Commencement of Term Agreement.

                Exhibit D - Tenant Improvement Work Letter.

                Exhibit E - Rules and Regulations.

                Addenda: Attached hereto and made a part of this Lease by
                reference is Section 32.

        2. LEASE OF PREMISES. In consideration of the Rent (as defined in
Section 4.1.2 below) and subject to the terms, covenants and conditions set
forth in this Lease, Landlord hereby leases to Tenant and Tenant leases from
Landlord the Premises. Tenant shall have the nonexclusive right (unless
otherwise expressly provided herein) in common with Landlord, other tenants,
subtenants and invitees, to use the Common Area. This Lease confers no rights
either to the subsurface of the land below the ground level of the Building in
which the Premises are located or to airspace, interior or exterior, above the
Premises.

        3.     DELIVERY OF POSSESSION.

           3.1 If for any reason Landlord does not deliver possession of the
Premises to Tenant on the Commencement Date, and such failure is not caused by
an act or omission of Tenant, the Expiration Date shall be extended by the
number of days the Commencement Date has been so delayed and the validity of
this Lease shall not be impaired nor shall Landlord be subject to any liability
for such failure; but Rent shall be abated until delivery of possession.
Provided, however, if the Commencement Date has been delayed by an act or
omission of Tenant, then Rent shall not be abated until delivery of possession
and the Expiration Date shall not be extended. If Landlord permits Tenant to
enter into possession of the Premises before the Commencement Date, such
possession shall be subject to the provisions of this Lease, including, without
limitation, the payment of Rent (unless otherwise agreed in writing). In the
event Tenant fails to take possession of the Premises following execution of
this Lease, Tenant shall reimburse Landlord promptly upon demand for all costs
incurred by Landlord in connection with entering into this Lease, including, but
not limited to, broker fees and commissions, sums paid for the preparation of a
floor and/or space plan for the Premises, costs incurred in performing
Landlord's Work pursuant to Exhibit "D", loss of rental income, attorneys' fees
and costs, and any other damages for breach of this Lease to which Landlord is
entitled at law or in equity.

           3.2 As of the Commencement Date, Landlord shall deliver possession of
the Premises to Tenant, and Tenant shall accept possession of the Premises in
their "AS IS" condition. Tenant acknowledges and agrees that Tenant and its
representatives have inspected the Premises and all of its structural and
mechanical elements and that Tenant is satisfied with the condition thereof.
This Lease, shall become effective with respect to the Premises upon the
Commencement Date. Except as expressly set forth in Exhibit "D", Tenant further
acknowledges and agrees that Landlord has no obligation and has made no promise
to alter, remodel, improve, repair, decorate or paint the Premises or any part
of the Premises, or to pay for any such work, and neither Landlord nor
Landlord's agents have made any representations to Tenant with respect to the
condition of the Premises.


                                       3
<PAGE>   9

        4.     RENT.

           4.1 Payment of Rent.

               4.1.1 Tenant shall pay Rent for the Premises. Monthly
Installments of Base Rent shall be payable in advance on the first day of each
calendar month of the Term commencing on the Rent Commencement Date. If the Term
begins (or ends) on other than the first (or last) day of a calendar month, Rent
for the partial month shall be prorated based on the number of days in that
month. Rent shall be paid to Landlord at the Rent Payment Address set forth in
Section 1.17 above, or to such other person at such place as Landlord may from
time to time designate in writing, without any prior demand therefor and without
deduction or offset, in lawful money of the United States of America. Tenant
shall pay Landlord the first Monthly Installment of Base Rent upon Tenant's
execution of this Lease.

               4.1.2 Tenant shall pay to Landlord all charges and other amounts
required under this Lease as additional rent ("Additional Rent"), including,
without limitation, the charges for Taxes and Expenses as provided for in this
Section 4. All such Additional Rent shall be payable to Landlord at the place
where the Base Rent is payable. Landlord will have the same remedies for a
default in the payment of any Additional Rent as for a default in the payment of
Base Rent. Base Rent and Additional Rent shall sometimes be collectively
referred to herein as "Rent".

           4.2 NOT USED

           4.3 Late Charges and Default Interest.

               4.3.1 If Tenant fails to pay when due any Rent or other amounts
or charges which Tenant is obligated to pay under the terms of this Lease, then
Tenant shall pay Landlord a late charge equal to five percent (5%) of each such
installment if any such installment is not received by Landlord within five (5)
days from the date it is due. Tenant acknowledges that the late payment of any
Rent will cause Landlord to lose the use of that money and incur costs and
expenses not contemplated under this Lease including, without limitation,
administrative costs and processing and accounting expenses, the exact amount of
which is extremely difficult to ascertain. Landlord and Tenant agree that this
late charge represents a reasonable estimate of such costs and expenses and is
fair compensation to Landlord for the loss suffered as a result of such late
payment by Tenant. However, the late charge is not intended to cover Landlord's
attorneys' fees and costs relating to delinquent Rent. Acceptance of any late
charge shall not constitute a waiver of Tenant's default with respect to such
late payment nor prevent Landlord from exercising any other rights or remedies
available to Landlord under this Lease. Late charges shall be deemed Additional
Rent. In no event shall this provision for the imposition of a late charge be
deemed to grant to Tenant a grace period or an extension of time within which to
pay any Rent due hereunder or prevent Landlord from exercising any right or
remedy available to Landlord upon Tenant's failure to pay such Rent when due.

               4.3.2 Any amount due Landlord by Tenant under the terms of this
Lease which are not paid when due shall bear interest from the date due to the
date of payment by Tenant at an annual rate of interest equal to the lesser of
(a) the maximum annual interest rate allowed by law on such due date for
business loans (not primarily for personal, family or household purposes) not
exempt from the usury law, or (b) twelve percent (12%), except that amounts
spent by Landlord on behalf of Tenant shall bear interest at such rate from the
date of disbursement by Landlord.

           4.4 Additional Rent for Taxes and Operating Expenses.

               4.4.1 Definitions. For purposes of this Section 4.4, the
following terms shall have the following meanings:

                     4.4.1.1 "Tax Year" means each twelve (12) consecutive month
period commencing January 1st of each year during the Term, including any
partial year during which the Lease may commence; provided that Landlord, upon
notice to Tenant, may change the Tax Year from time to time to any other twelve
(12) consecutive month period and, in the event of any such change, Tenant's
Proportionate Share of Taxes shall be equitably adjusted for the Tax Year
involved in any such change. Tenant shall not be obligated to pay Additional
Rent for taxes and operating expenses from the Commencement Date through
December 31, 2001.


                                       4
<PAGE>   10

                     4.4.1.2 "Taxes" shall mean and include all taxes,
assessments and charges levied upon or with respect to the Real Property or any
personal property located on the Real Property and used in the operation thereof
or upon or with respect to any ownership or possessory interest in the Real
Property or such personal property. Taxes shall include, without limitation, all
general real property taxes and general and special assessments, charges, fees,
or assessments for transit, housing, police, fire, or other governmental
services or purported benefits to the Real Property or the occupants thereof,
service payments in lieu of taxes, business taxes, and any tax, fee, or excise
on the act of entering into this Lease or any other lease of space located on
the Real Property, or on the use or occupancy of the Real Property or any part
thereof, that are now or hereafter levied or assessed against Landlord by the
United States of America, the State of California or any political subdivision
thereof, public corporation, district, or any other political or public entity,
and shall also include any other tax, fee or other excise, however described,
that may be levied or assessed as a substitute for, or as an addition to, in
whole or in part, any other Taxes, whether or not now customary or in the
contemplation of the parties on the Commencement Date. Taxes shall also include
reasonable legal fees, costs, and disbursements incurred in connection with
proceedings to contest, determine, or reduce Taxes. Taxes shall not include (i)
franchise, transfer, inheritance, or capital stock taxes or income taxes
measured by the net income of Landlord from all sources unless, due to a change
in the method of taxation, any of such taxes is levied or assessed against
Landlord as a substitute for, or as an addition to, in whole or in part, any
other tax that would otherwise be included within Taxes; (ii) penalties incurred
as a result of Landlord's negligence, inability or unwillingness to make
payments of, and/or to file any tax or information returns with respect to, any
Taxes, when due; (iii) any Taxes directly payable by Tenant or any other tenant
within the Building under the applicable provisions in their respective leases;
and (iv) any items included as an Operating Expense.

                     4.4.1.3 "Expense Year" means each twelve (12) consecutive
month period commencing January 1st of each year during the Term, including any
partial year during which the Lease may commence; provided that Landlord, upon
notice to Tenant, may change the Expense Year from time to time to any other
twelve (12) consecutive month period and, in the event of any such change,
Tenant's Proportionate Share of Operating Expenses shall be equitably adjusted
for the Expense Year involved in any such change.

                     4.4.1.4 "Operating Expenses" shall mean and include the
total costs and expenses paid or incurred by Landlord in connection with the
management, operation, maintenance and repair of the Building (including Common
Area), including, without limitation: (a) the cost of air conditioning,
electricity, steam, water, heating, mechanical, telephone, plumbing, ventilating
and elevator systems and all other utilities, including without limitation,
reasonable attorneys' fees and/or consultant fees incurred by Landlord in
contracting with a company or companies to provide electricity (or any other
utility) to the Building, any fees for the installation, maintenance, repair or
removal of related equipment, and any exit fees or stranded cost charges
mandated by the State of California; (b) the cost of repairs and all labor and
material costs related thereto, and the cost of general maintenance, cleaning
and service contracts and the cost of all supplies, tools and equipment required
in connection therewith; (c) the cost incurred by Landlord for all insurance
carried on the Building and/or Real Property or in connection with the use
and/or occupancy thereof, including, without limitation, the premiums and cost
of fire, casualty, liability, rental abatement and earthquake insurance
applicable to the Building and/or Real Property and Landlord's personal property
used in connection therewith (and all amounts paid as a result of loss sustained
that would be covered by such policies but for "deductible" or self-insurance
provisions), provided, however, that Landlord may, but shall not be obligated
to, carry earthquake insurance; (d) wages, salaries, payroll taxes and other
labor costs and employee benefits; (e) management fees; (f) fees, charges and
other costs of all independent contractors engaged by Landlord; (g) accounting
and legal expenses; (h) depreciation on personal property, including, without
limitation, carpeting in public corridors and the Common Area and window
coverings provided by Landlord, determined in the reasonable judgment of
Landlord in accordance with generally accepted accounting principles and
consistent with industry standards and sound management practices; (i) the
rental paid for offices for the property manager and related management and
operations personnel, or if rental is not paid, the fair rental value of any
space provided for such purposes; (j) the cost of any capital improvements made
to the Building and/or Real Property after the Commencement Date that (i) are
reasonably anticipated to reduce Operating Expenses or improve operating
efficiencies in the Building, or (ii) are reasonably required for the health and
safety of tenants in the Building or of the public, or (iii) are required under
any governmental law or regulation or insurance requirement, such cost in each
case to be amortized over such period as Landlord shall reasonably determine in
accordance with generally accepted accounting principles and consistent with
industry standards and sound management practices, together with interest on the
unamortized balance thereof at the rate of ten percent (10%) per annum or such
higher


                                       5
<PAGE>   11

rate as may have been paid by Landlord on funds borrowed for the purpose of
constructing such capital improvements; (k) the cost of contesting the validity
or applicability of any governmental enactments which may affect Operating
Expenses; (l) any and all assessments or costs incurred with respect to
covenants, conditions and restrictions, reciprocal easement agreements or
similar documents affecting the Building and/or Real Property; and (m) any other
expenses of any kind whatsoever incurred in connection with the management,
operation, maintenance and repair of the Building and/or Real Property which, in
the reasonable judgment of Landlord and in accordance with generally accepted
accounting principles and consistent with industry standards and sound
management practices, would be considered a management, maintenance, or
operating expense.

               Notwithstanding the foregoing, the following shall not be
included within Operating Expenses: (i) Landlord's general overhead and
administrative expenses, including executive salaries and service personnel, to
the extent not allocable to the operation or management of the Building; (ii)
all costs incurred in designing, renovating or otherwise improving or
decorating, painting or redecorating space for existing or prospective tenants
or other occupants of the Building; (c) any reserves for capital replacements;
(iii) the cost of utilities, services and other benefits (including, but not
limited to, after-hours HVAC) for which individual tenants (including Tenant)
reimburse Landlord or directly pay service providers, or costs in connection
with services or other benefits provided selectively to one or more tenants
(other than Tenant) and which do not benefit Tenant (except Landlord's cost
related to repair and maintenance of any and all balconies in the Building);
(iv) depreciation and amortization, except to the extent specifically provided
in items (h) and (j) of the preceding paragraph of this Section 4.4.1.4); (v)
Payments in respect to overhead or profits to subsidiaries or affiliates of
Landlord, or to any party affiliated with Landlord, for management or other
services in or to the Building, or for supplies or other materials, to the
extent that the cost of such services, supplies, or materials exceeds the fair
market cost that would be charged by non-affiliated third parties dealing with
Landlord on an arms-length basis; (vi) leasing commissions, finder's fees,
advertising and promotional costs and other expenses incurred in connection with
leasing space to prospective tenants or other occupants, or to retain existing
tenants; (vii) any fines, penalties or interest resulting from Landlord's
violation of any federal, state or local law or regulation; (viii) principal,
interest, points and fees on debt or amortization payments on any real property
mortgages or deeds of trust, or any fines or penalties associated with the
foregoing; (ix) rental payments made under any ground lease; and (x) the costs
of repair or maintenance to the Building, including the Premises and other costs
and expenses (which would otherwise be included as part of Operating Expenses),
to the extent such costs are reimbursed by insurance, guaranties, warranties,
governmental agencies, or other tenants or occupants.

               4.4.2 If during any calendar year of the Term the occupancy of
the Building is less than ninety-five percent (95%), then Landlord shall make an
appropriate adjustment of the variable components of Operating Expenses, as
reasonably determined by Landlord, to determine the amount of Operating Expenses
that would have been incurred had the Building been ninety-five percent (95%)
occupied during that calendar year. This estimated amount shall be deemed the
amount of Operating Expenses for that calendar year. For purposes hereof,
"variable components" shall include only those Operating Expenses that are
affected by variations in occupancy levels.

               4.4.3  Determination and Payment of Taxes and Operating Expenses.

                      4.4.3.1 Tenant shall pay to Landlord as Additional Rent
one twelfth (1/12) of Tenant's Share of Tenant's Proportionate Share of (i) the
amount, if any, by which Operating Expenses for each Expense Year or portion
thereof during the Term exceed the Operating Expenses in the Base Year (the
"Expense Increases"), plus (ii) the amount, if any, by which Taxes for each Tax
Year or portion thereof during the Term exceed the Taxes in the Base Year (the
"Tax Increases"), in advance, on or before the first day of each month during
such Expense Year and Tax Year, in an amount estimated by Landlord in a writing
delivered to Tenant on or before the last day of each December during the Term
of this Lease. Landlord may revise such estimates from time to time and Tenant
will thereafter make payments on the basis of such revised estimates commencing
on the next payment date for Additional Rent following Tenant's receipt of such
revised estimates. Neither Landlord's failure to deliver nor late delivery of
such statement shall constitute a default by Landlord or a waiver of Landlord's
right to any adjustment provided for herein.

                      4.4.3.2 On or before the first day of each April after the
expiration of each Expense Year and Tax Year, including the Expense Year and Tax
Year during which this Lease terminates, Landlord will furnish Tenant with a
statement (herein called "Landlord's Expense and Tax Statement"), setting forth
in reasonable detail the Expense Increases for such Expense Year and the Tax
Increases for such Tax Year and Tenant's


                                       6
<PAGE>   12

Proportionate Share of the Expense Increases and Tax Increases, which statement
shall be conclusive and binding upon Tenant. If Tenant's Proportionate Share of
the actual Expense Increases and the Tax Increases for such Expense Year and Tax
Year as set forth in Landlord's Expense and Tax Statement exceeds the estimated
Expense Increases and Tax Increases paid by Tenant for such Expense Year and Tax
Year, Tenant shall pay to Landlord (whether or not this Lease has terminated)
the difference with respect to such Expense Increases or Tax Increases or both,
as the case may be, within ten (10) days after the receipt of Landlord's Expense
and Tax Statement; and if the total amount paid by Tenant for any such Expense
Year and Tax Year shall exceed Tenant's Proportionate Share of the actual
Expense Increases and Tax Increases for such Expense Year and Tax Year, such
excess shall be credited against the next installment of Rent due from Tenant to
Landlord hereunder, or, if this Lease has terminated and no amounts are due or
to become due to Landlord from Tenant hereunder, any excess shall be paid to
Tenant by check within ten (10) days after such final determination of the
actual Expense Increases and Tax Increases. Neither Landlord's failure to
deliver nor late delivery of Landlord's Expense and Tax Statement to Tenant by
April 1st shall constitute a default by Landlord or operate as a waiver of
Landlord's right to collect all Rent due hereunder.

                      4.4.3.3 Notwithstanding anything to the contrary contained
in this Lease, in the event that the Operating Expenses or Taxes for any Lease
Year and/or Tax Year, as applicable, are less than the Operating Expenses or
Taxes in the Base Year, the Base Rent computed in such Lease Year or Tax Year,
as applicable, shall not be reduced nor shall Tenant be entitled to a credit
against any Base Rent or other sums payable by Tenant hereunder or to a payment
from Landlord to Tenant with respect thereto.

           4.5 Taxes on Tenant's Use and Occupancy. In addition to the Rent and
any other charges to be paid by Tenant hereunder, Tenant shall pay Landlord upon
demand for any and all taxes payable by Landlord (other than net income taxes)
which are not otherwise reimbursable under this Lease, whether or not now
customary or within the contemplation of the parties, where such taxes are upon,
measured by or reasonably attributable to: (a) the cost or value of Tenant's
equipment, furniture, fixtures and other personal property located in the
Premises, or the cost or value of any Leasehold Improvements (as defined in
Section 9.5 below) made in or to the Premises by or for Tenant, regardless of
whether title to such improvements is held by Tenant or Landlord; (b) the gross
or net Rent payable under this Lease, including, without limitation, any rental
or gross receipts tax levied by any taxing authority with respect to the receipt
of the Rent hereunder; (c) the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; or (d) this transaction or any document to which Tenant is
a party creating or transferring an interest or an estate in the Premises. If it
becomes unlawful for Tenant to reimburse Landlord for any costs as required
under this Lease, the Base Rent shall be revised to net Landlord the same net
Rent after imposition of any tax or other charge upon Landlord as would have
been payable to Landlord but for the reimbursement being unlawful.

        5.     SECURITY DEPOSIT.

           5.1 Upon the execution of this Lease, Tenant shall deposit with
Landlord a security deposit ("Security Deposit") in cash in the amount specified
in Section 1.21 above as security for the faithful performance and observation
by Tenant of the terms, covenants and conditions of this Lease. Landlord shall
not be required to keep the Security Deposit separate from its general accounts.
If Tenant defaults in respect of any of the terms, covenants or conditions of
this Lease, including, without limitation, the payment of Rent, Landlord may
use, apply or retain the whole or any part of the Security Deposit to the extent
required for the payment of any Base Rent or any other sum as to which Tenant is
in default, including, without limitation, (a) any sum which Landlord may expend
or may be required to expend by reason of Tenant's default in respect of any of
the terms, covenants or conditions of this Lease, or to compensate Landlord for
any loss or damage which Landlord may suffer thereby, and/or (b) any damages or
deficiency in the reletting of the Premises, whether such damages or deficiency
accrue or accrues before or after summary proceedings or other reentry by
Landlord. If Landlord applies or retains any part of the Security Deposit,
Tenant, upon demand, shall immediately deposit with Landlord the amount so
applied or retained so that Landlord shall have the full Security Deposit on
hand at all times during the Term; Tenant's failure to do so shall constitute an
act of default, and Landlord shall have the right to exercise any remedy
provided for in Section 15.2 below. If Tenant shall fully and faithfully comply
with all of the terms, covenants and conditions of this Lease, the Security
Deposit shall be returned to Tenant (or, at Landlord's option, to the last
subtenant or assignee of Tenant's interest hereunder) within the time period
statutorily prescribed after the Expiration Date and after delivery of the
entire possession of the Premises to Landlord. Tenant expressly agrees that
Tenant shall have no right to apply any portion of the Security Deposit against
any of Tenant's obligations to pay rent hereunder. In


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<PAGE>   13

the event of any conveyance of title to the Building, Landlord shall have the
right to transfer the Security Deposit to the new landlord, and Landlord shall
thereupon be released by Tenant from all liability for the return of the
Security Deposit. Provided the Security Deposit has been so transferred, Tenant
shall look solely to the new landlord for the return of the Security Deposit.
The provisions hereof shall apply to every transfer or assignment made of the
Security Deposit to a new landlord. Tenant further covenants and agrees that it
shall not assign or encumber or attempt to assign or encumber the Security
Deposit and neither Landlord or its successors or assignees shall be bound by
any such agreement, encumbrance, attempted assignment or attempted encumbrance.

           5.2 If Tenant defaults under this Lease more than two (2) times
during any calendar year, irrespective of whether such default is cured, then,
without limiting Landlord's other rights and remedies, Landlord may, in
Landlord's sole discretion, increase the amount of the required Security
Deposit. Within ten (10) days after notice of such modification, Tenant shall
submit to Landlord the required additional sums. Tenant's failure to do so shall
constitute an event of default, and Landlord shall have the right to exercise
any remedy provided for in Section 15.2 below.

        6. TENANT'S USE OF THE PREMISES. The provisions of this Section 6 are
for the benefit of the Landlord and are not nor shall they be construed to be
for the benefit of any tenant of the Building.

           6.1 Use. Tenant shall use the Premises solely for the purposes set
forth in Section 1.15. No change in the use of the Premises shall be permitted,
except as provided in this Section 6.1. If, at any time during the Term hereof,
Tenant desires to change the use of the Premises, including any change in use
associated with a proposed assignment or sublet of the Premises, Tenant shall
provide notice to Landlord of its request for approval of such proposed change
in use, together with such information concerning the proposed change in use as
Landlord may reasonably request. Landlord shall have the right to approve such
proposed change in use in its sole and absolute discretion. Landlord's consent
to any change in use shall not be construed as a consent to any subsequent
change in use.

           6.2 Observance of Law. Tenant shall not use or occupy the Premises or
permit anything to be done in or about the Premises in violation of any
declarations, covenant, condition or restriction, or law, statute, ordinance or
governmental rules, regulations or requirements now in force or which may
hereafter be enacted or promulgated. Tenant, at Tenant's cost and expense, shall
comply with all laws, orders and regulations of federal, state, county and
municipal authorities relating to the Premises or the use, improvement or
occupancy thereof, except that Tenant shall not be required to make any
structural alterations in order to comply unless such alterations shall be
necessitated or occasioned, in whole or in part, by Tenant Alterations (as
defined in Section 9.3 below), or by the acts, omissions or negligence of Tenant
or its agents, employees, contractors, licensees or invitees ("Tenant
Party(ies)"). Any work or installations made or performed by or on behalf of
Tenant or any person or entity claiming through or under Tenant pursuant to the
provisions of this Section 6.2 shall be made in conformity with and subject to
the provisions of Section 9 below.

           6.3 Insurance. Tenant shall not do or permit to be done anything
which will contravene, invalidate or increase the cost of any insurance policy
covering the Real Property, the Building and/or personal property located
therein, and shall comply with all rules, orders, regulations, requirements and
recommendations of Landlord's insurance carrier(s) or any board of fire
insurance underwriters or other similar body now or hereafter constituted,
relating to or affecting the condition, use or occupancy of the Premises,
excluding structural changes not related to or affected by Tenant Alterations or
by the acts, omissions or negligence of Tenant or a Tenant Party. Tenant shall
promptly upon demand reimburse Landlord for any additional premium charged for
violation of this Section.

           6.4 Nuisance and Waste. Tenant shall not do or permit anything to be
done in or about the Premises or Building which will in any way obstruct or
interfere with the rights of other tenants or occupants of the Building, or
injure or annoy them, or use or allow the Premises to be used for any improper,
unlawful or objectionable purpose. Tenant shall not cause, maintain or permit
any nuisance in, on or about the Premises or Building. Tenant shall not commit
or suffer to be committed any waste in or upon the Premises or Building.

           6.5 Load and Equipment Limits. Tenant shall not place a load upon any
floor of the Premises which exceeds the load per square foot which such floor
was designed to carry as determined by Landlord or Landlord's structural
engineer. The cost of any such determination made by Landlord's structural
engineer in


                                       8
<PAGE>   14

 connection with Tenant's occupancy shall be paid by Tenant upon
Landlord's demand. Tenant shall not install business machines or mechanical
equipment which will in any manner cause noise objectionable to or injure other
tenants in the Building.

           6.6    Hazardous Material.

               6.6.1 As used in this Lease, the following items shall have the
following meanings: "Environmental Activity" means any actual, proposed or
threatened use, storage, treatment, existence, release, emission, discharge,
generation, manufacture, disposal or transportation of any Hazardous Materials
from, into, on, under or about the Building or the Premises, or any other
activity or occurrence that causes or would cause any such event to exist;
"Environmental Requirements" means all present and future federal, state,
regional or local laws relating to the use, storage, treatment, existence,
release, emission, discharge, generation, manufacture, disposal or
transportation of any Hazardous Materials; and "Hazardous Material" means at any
time any substances or materials which at such time are classified or considered
to be hazardous or toxic under any Environmental Requirement.

               6.6.2 Tenant shall not engage in nor permit its Tenant Parties to
engage in any Environmental Activity in violation of Environmental Requirements
in, on or about the Premises or Building. Tenant shall, at its own expense,
procure, maintain in effect and comply with all conditions of any and all
permits, licenses, and other governmental and regulatory approvals required
under any Environmental Requirements for any Environmental Activity by Tenant or
a Tenant Party, including, without limitation, the discharge of (appropriately
treated) materials or wastes into or through any sanitary sewer serving the
Building or the Premises, and upon termination of this Lease, Tenant shall cause
all of its Hazardous Materials to be removed from the Building and the Premises
in accordance with and in compliance with all applicable Environmental
Requirements. Upon having knowledge thereof, Tenant shall immediately notify
Landlord in writing of: any regulatory action that has been instituted, or
threatened by any governmental agency or court with respect to Tenant or a
Tenant Party that relates to any Environmental Activity; any claim relating to
any Environmental Activity by Tenant or a Tenant Party in, on or about the
Building or the Premises, or that arises out of or in connection with any
Hazardous Materials in, on, under or about the Building or the Premises or
removed from the Building or the Premises; or any actual or threatened material
release on, under or about the Building or the Premises or any adjacent property
of any Hazardous Material, except any Hazardous Material whose discharge or
emission is expressly authorized by and in compliance with a permit issued by a
federal, state, regional or local governmental agency pursuant to Environmental
Requirements. Tenant shall provide Landlord with copies of any communications
with federal, state, regional or local governments, agencies or courts with
respect to any Environmental Activity or Environmental Requirement relating to
the Building or the Premises and any communications with any third party
relating to any claim made or threatened with respect to any Environmental
Activity by Tenant or a Tenant Party in, on or about the Building or the
Premises.

               6.6.3 Tenant shall indemnify, defend (by counsel reasonably
acceptable to Landlord), protect, and hold Landlord and each of Landlord's
partners, employees, agents, attorneys, successors and assigns, free and
harmless from and against any and all claims, liabilities, penalties,
forfeitures, losses or expenses (including reasonable attorneys' fees) to the
extent arising from or caused, directly or indirectly, by (i) an Environmental
Activity by Tenant or a Tenant Party, or (ii) Tenant's or a Tenant Party's
failure to comply with any Environmental Requirement relating to an
Environmental Activity by Tenant or a Tenant Party in, on or about the Premises.
Tenant's obligations under this Section 6.6.3 shall include, without limitation,
and whether foreseeable or unforeseeable, all costs of any repair, damage or
cleanup, removal or remediation action, or detoxification or decontamination of
the Building or the Premises, or the preparation and implementation of any
closure, remedial action or other plans in connection therewith that are
required as a result of any Environmental Activity by Tenant. The provisions of
this Section 6.6.3 shall survive the expiration or sooner termination of this
Lease.

               6.6.4 California law requires landlords to disclose to tenants
the existence of certain Hazardous Materials. Accordingly, the existence of
gasoline and other automotive fluids, asbestos containing materials, maintenance
fluids, copying fluids and other office supplies and equipment, certain
construction and finish materials, tobacco smoke, cosmetics and other personal
items must be disclosed. Gasoline and other automotive fluids are found in the
parking areas of the Building. Cleaning, lubricating and hydraulic fluids used
in the operation and maintenance of the Building are found in the utility areas
of the Building not generally accessible to Building occupants or the public.
Many Building occupants use copy machines and printers with associated fluids
and toners, and pens, markers, inks, and office equipment that may contain
Hazardous Materials. Certain adhesives, paints and other construction materials
and finishes used in portions of the Building may contain Hazardous Materials.
The


                                       9
<PAGE>   15

Building may from time to time be exposed to tobacco smoke. Building occupants
and other persons entering the Building from time to time may use or carry
prescription and non-prescription drugs, perfumes, cosmetics and other
toiletries, and foods and beverages, some of which may contain Hazardous
Materials.

        7.     SERVICES AND UTILITIES.

           7.1 Landlord agrees to furnish services and utilities to the Premises
during normal business hours on generally recognized business days subject to
the Rules and Regulations (as defined in Section 23 below) of the Building and
provided that Tenant is not in default hereunder. Services and utilities shall
include reasonable quantities of electricity, heating, ventilation and air
conditioning ("HVAC") as required in Landlord's reasonable judgment for the
comfortable use and occupancy of the Premises; lighting replacement for Building
standard lights; elevator service; window washing, restroom supplies and janitor
services in a manner that such services are customarily furnished to comparable
office buildings in the area. Landlord shall supply Common Area water for
drinking, cleaning and restroom purposes only. Tenant, at Tenant's sole cost and
expense, shall supply all paper and other products used within the Premises.
During normal business hours on generally recognized business days, Landlord
shall also maintain and keep lighted the common stairs, common entries and
restrooms in the Building. If Tenant desires HVAC or other services at any other
time, Landlord shall use reasonable efforts to furnish such service upon
reasonable notice from Tenant, and Tenant shall pay the standard charge for such
additional services as reasonably determined by Landlord from time to time.

           7.2 If permitted by law, Landlord shall have the right, in Landlord's
reasonable discretion, at any time and from time to time during the Term, to
contract for the provision of electricity (or any other utility) with, and to
switch from, any company providing such utility. Tenant shall cooperate with
Landlord and any such utility provider at all times, and, as reasonably
necessary, Tenant shall allow such parties access to the electric (or other
utility) lines, feeders, risers, wiring and other machinery located within the
Premises.

           7.3 Landlord shall not be in default hereunder or be liable for any
damages directly or indirectly resulting from, nor shall Rent be abated by
reason of (a) the installation, use or interruption of use of any equipment in
connection with the furnishing of any of the foregoing services, or (b) failure
to furnish or delay in furnishing any such services where such failure or delay
is caused by accident or any condition or event beyond the reasonable control of
Landlord, or by the making of necessary repairs or improvements to the Premises
or Building, or (c) any change, failure, interruption, disruption or defect in
the quantity or character of the electricity (or other utility) supplied to the
Premises or Building, or (d) the limitation, curtailment or rationing of, or
restrictions on, use of water, electricity, gas or any other form of energy
serving the Premises or Building. Landlord shall not be liable under any
circumstances for a loss of or injury to property or business, however
occurring, through, in connection with or incidental to the failure to furnish
any such services.

           7.4 Tenant shall not consume electric current in excess of that
usually furnished or supplied for the use of premises as office space (as
determined by Landlord), without first procuring the written consent of
Landlord, which Landlord may refuse in its absolute discretion. In the event of
consent, electrical current shall be separately metered in Tenant's name and
paid for directly by Tenant. The cost of any such meter and its installation,
maintenance and repair shall be paid by Tenant.

           7.5 Tenant shall not purchase electricity from a provider other than
the company or companies used by Landlord, without first procuring the written
consent of Landlord, which Landlord may refuse in its absolute discretion. In
the event of consent, electrical current shall be separately metered in Tenant's
name and paid for directly by Tenant. The cost of any such meter and its
installation, maintenance and repair and any and all costs of obtaining
electricity from such provider shall be paid by Tenant. Tenant shall indemnify,
defend, and hold harmless Landlord from and against all losses, claims, demands,
expenses and judgments caused by, or directly or indirectly arising from, the
acts or omissions of Tenant's electricity provider (including, but not limited
to, expenses and/or fines incurred by Landlord in the event Tenant's electricity
provider fails to provide sufficient power to the Premises, as well as damages
resulting from the improper or faulty installation or construction of facilities
or equipment in or on the Premises by Tenant or Tenant's electricity provider).

           7.6 Nothing contained in this Section 7 shall restrict Landlord's
right to require at any time separate metering of utilities furnished to the
Premises. If the separate metering of utilities furnished to the Premises is due
to Tenant's excessive use of electric current, then the cost of any such meter
and its installation, maintenance


                                       10
<PAGE>   16

and repair shall be paid by Tenant. If Landlord requires separate metering for
reasons other than Tenant's excessive consumption of electric current, then the
cost of any such meter and its installation, maintenance and repair shall be
paid by Landlord. In either event, accounts for all such separately metered
utilities shall be in Tenant's name and paid for directly by Tenant.

           7.7 If Tenant uses heat generating machines or equipment in the
Premises that affects the temperature otherwise maintained by the HVAC system,
Landlord reserves the right to install supplementary air conditioning units in
the Premises and the cost thereof, including the cost of installation, operation
and maintenance thereof, shall be paid by Tenant to Landlord upon demand
therefor.

           7.8 In the event of imposition of federal, state or local government
controls, rules, regulations, or restrictions on the use or consumption of
energy or other utilities (including telecommunications) during the Term, both
Landlord and Tenant shall be bound thereby. In the event of a difference in
interpretation by Landlord and Tenant of any such controls, the interpretation
of Landlord shall prevail and Landlord shall have the right to enforce
compliance therewith, including the right of entry into the Premises to effect
compliance.

        8.     REPAIRS AND MAINTENANCE.

           8.1 Landlord's Obligations. Landlord shall as an Operating Expense
make structural repairs except as specified herein and maintain in good order,
condition and repair the Building, and all portions of the Premises not the
obligation of Tenant or of any other tenant in the Building; provided, however,
Tenant shall be obligated to reimburse Landlord for the entire cost of any
repair or maintenance necessitated or occasioned by the acts, omissions or
negligence of Tenant, or any of Tenant Parties. Tenant hereby waives and
releases any right it may have to make repairs at Landlord's expense under
Sections 1941 and 1942 of the California Civil Code or under any similar law,
statute or ordinance now or hereafter in effect.

           8.2 Tenant's Obligations. Tenant shall, at Tenant's sole expense and
except for services furnished by Landlord pursuant to Section 7 above, maintain
the Premises in good order, condition and repair. For the purposes of this
Section 8.2, the term Premises shall be deemed to include all items and
equipment installed by or for the benefit of or at the expense of Tenant
including, without limitation, the interior surfaces of the ceilings, walls and
floors; all doors; all interior windows; dedicated HVAC equipment; all plumbing,
pipes and fixtures; electrical switches and fixtures; internal wiring; and
Tenant Improvements, if any. In addition, Tenant shall be responsible for all
repairs and alterations in and to the Premises and Building and the facilities
and systems thereof to the satisfaction of Landlord, the need for which arises
out of (a) Tenant's use or occupancy of the Premises, (b) the installation,
removal, use or operation of Tenant's Property (as defined in Section 9.6 below)
in the Premises, (c) the moving of Tenant's Property into or out of the
Building, or (d) the act, omission, misuse or negligence of Tenant or a Tenant
Party. If Tenant fails to so maintain the Premises and Building, Landlord shall
give notice to Tenant to do such acts as are reasonably required. If Tenant
fails to promptly commence such work and diligently prosecute it to completion,
then Landlord shall have the right to do such acts and expend such funds at the
expense of Tenant as are reasonably required to perform such work.

           8.3 Landlord's Liability. Except as otherwise expressly provided in
this Lease, Landlord shall have no liability to Tenant nor shall Tenant's
obligations under this Lease be reduced or abated in any manner by reason of any
inconvenience, annoyance, interruption or injury to business arising from
Landlord's making any repairs or changes which Landlord is required or permitted
by this Lease or by any other tenant's lease or required by law to make in or to
any portion of the Real Property, Building or Premises. Landlord shall
nevertheless use reasonable efforts to minimize any interference with Tenant's
conduct of its business in the Premises.

        9.     CONSTRUCTION; ALTERATIONS; LEASEHOLD IMPROVEMENTS; AND TENANT'S
               PROPERTY.

           9.1 Landlord's Construction Obligations. Landlord shall perform
Landlord's Work to the Premises as described on Exhibit "D".

           9.2 Tenant's Construction Obligations. Tenant shall perform Tenant's
Work to the Premises as described in Exhibit "D" and shall comply with all of
the provisions of this Section 9.


                                       11
<PAGE>   17

           9.3 Tenant Alterations. After the installation of Tenant's Work which
shall be governed by the terms and conditions of Exhibit "D", Tenant shall not
make any additions, alterations or improvements to the Premises ("Tenant
Alterations") without obtaining the prior written consent of Landlord, which
consent shall not be unreasonably withheld; provided, however, that Tenant shall
not, without the prior written consent of Landlord, which consent shall be in
Landlord's sole discretion, make any Tenant Alterations which: (a) will affect
the structure or structural components of the Building (including by way of
illustration but not limitation, the construction of interior stairwells,
skylights, dumbwaiters and additional floor supports) or the building systems,
(b) will affect or be visible from the exterior of the Building, (c) will be
located outside or underneath the Building, or (d) will lessen the fair market
value of the Building. Landlord's consent to any Tenant Alterations may be
conditioned, without limitation, on Tenant removing any such Tenant Alterations
on or before the expiration of the Term and restoring the Premises to the same
condition as on the date Tenant took possession. All Tenant Alterations shall
comply with all applicable laws, ordinances, codes and rules of any public
authority (including, but not limited to, the Americans with Disabilities Act)
and shall be done in a good and professional manner by properly qualified and
licensed personnel approved by Landlord. All work shall be diligently prosecuted
to completion. Upon completion, Tenant shall furnish Landlord "as-built" plans.
Prior to commencing any Tenant Alteration, Tenant shall furnish Landlord with
plans and specifications; names and addresses of contractors; copies of all
contracts; copies of all necessary permits; evidence of contractor's and
subcontractor's insurance coverage for Builder's Risk at least as broad as
Insurance Services Office ("ISO") special causes of loss form CP 10 30,
Commercial General Liability at least as broad as ISO CG 00 01, workers'
compensation, employer's liability and auto liability, all in amounts reasonably
satisfactory to Landlord; and an indemnification in a form reasonably
satisfactory to Landlord. Tenant shall pay to Landlord upon demand reimbursement
for third party costs incurred by Landlord in connection with its review and
approval of the proposed Tenant Alterations. The work shall be performed in a
manner that will not interfere with the quiet enjoyment of the other tenants in
the Building. Landlord may require, in Landlord's sole discretion and at
Tenant's sole cost and expense, that Tenant provide Landlord with a lien and
completion bond in an amount equal to at least one and one-half (1-1/2) times
the total estimated cost of any Tenant Alterations to be made in or to the
Premises. Nothing contained in this Section 9.3 shall relieve Tenant of its
obligation under Section 9.4 to keep the Premises and Building free of all
liens.

           9.4 Liens. Tenant shall pay the costs of any work done on the
Premises pursuant to Sections 9.2 and 9.3, and shall keep the Premises and
Building free and clear of liens of any kind. Tenant hereby indemnifies, and
agrees to defend against and keep Landlord free and harmless from all liability,
loss, damage, costs, attorneys' fees and any other expense incurred on account
of claims by any person performing work or furnishing materials or supplies for
Tenant or any person claiming under Tenant. Tenant shall give notice to Landlord
at least ten (10) business days prior to the expected date of commencement of
any Tenant Alterations. Landlord retains the right to enter the Premises and
post such notices as Landlord deems proper at any reasonable time.

           9.5 Leasehold Improvements. All of Tenant's Work and Tenant
Alterations (collectively, the "Leasehold Improvements") attached to or built
into the Premises during the Term of this Lease, whether or not by or at the
expense of Tenant, shall be and remain a part of the Premises, shall be the
property of Landlord and shall not be removed by Tenant, unless their removal is
required by Landlord as provided in Section 9.3 above, except as expressly
provided in Section 9.6 below. In the event that Tenant is required to remove
any Leasehold Improvements, Tenant shall, at Tenant's sole cost and expense and
prior to the expiration of the Term, remove the Leasehold Improvements and
repair any damage to the Premises or to the Building resulting from such
removal.

           9.6 Tenant's Property. All signs, notices, displays, movable
partitions, business and trade fixtures, machinery and equipment (excluding
HVAC, whether installed by Tenant or not), personal telecommunications equipment
and office equipment located in the Premises and acquired by or for the account
of Tenant, without expense to Landlord, which can be removed without structural
damage to the Building, and all furniture, furnishings and other articles of
movable personal property owned by Tenant and located in the Premises
(collectively, "Tenant's Property") shall be and shall remain the property of
Tenant and may be removed by Tenant at any time during the Term; provided that
if any of Tenant's Property is removed, Tenant shall promptly repair any damage
to the Premises or to the Building resulting from such removal including,
without limitation, repairing the flooring and patching and painting the walls
where required by Landlord to Landlord's reasonable satisfaction, all at
Tenant's sole cost and expense.


                                       12
<PAGE>   18

        10.    INDEMNIFICATION.

           10.1 Tenant Indemnification. Tenant shall indemnify and hold Landlord
harmless from and against any and all liability and claims of any kind for loss
or damage to any person or property arising out of: (a) Tenant's or any Tenant
Party's use and occupancy of the Premises or the Building, or any work, activity
or thing done, allowed or suffered by Tenant or a Tenant Party in, on or about
the Premises or Building; (b) any breach or default by Tenant of any of Tenant's
obligations under this Lease; (c) the condition of the Premises or any
occurrence on the Premises from any cause whatsoever, or (d) any acts, omissions
or negligence of Tenant or a Tenant Party in, on or about the Premises or the
Building. At Landlord's request, Tenant shall, at Tenant's expense, and by
counsel satisfactory to Landlord, defend Landlord in any action or proceeding
arising from any such claim. Tenant shall indemnify Landlord against all costs,
attorneys' fees, expert witness fees and any other expenses or liabilities
incurred in such action or proceeding. As a material part of the consideration
for Landlord's execution of this Lease, Tenant hereby assumes all risk of damage
or injury to any person or property in, on or about the Premises from any cause
and Tenant hereby waives all claims in respect thereof against Landlord, except
in connection with damage or injury resulting solely from the gross negligence
or willful misconduct of Landlord or its authorized agents. The term "gross
negligence" as used in this Lease shall mean "any action or inaction taken with
a reckless disregard for the consequences". Tenant's obligations under this
Section 10.1 shall survive the expiration or sooner termination of this Lease.

           10.2 Landlord Not Liable. Landlord shall not be liable for injury or
damage which may be sustained by the person or property of Tenant, a Tenant
Party, or any other person in or about the Premises, caused by or resulting from
fire, steam, electricity, gas, water or rain which may leak or flow from or into
any part of the Premises, or from the breakage, leakage, obstruction or other
defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning,
lighting fixtures or mechanical or electrical systems, whether such damage or
injury results from conditions arising upon the Premises or upon other portions
of the Building or from other sources, unless the condition was the sole result
of Landlord's gross negligence or willful misconduct. Landlord shall not be
liable for any damages arising from any act or omission of any other tenant of
the Building or for the acts of persons in, on or about the Premises or Building
who are not the authorized agents of Landlord or for losses due to theft,
vandalism or like causes. Tenant acknowledges that Landlord may elect in its
sole discretion to provide mechanical surveillance or to post security personnel
in the Building or on the Real Property, and without notice to Tenant, Landlord
may in its sole discretion elect to remove any such mechanical surveillance or
security personnel. Landlord shall have no liability in connection with the
decision to provide or remove such services, and, to the extent permitted by
law, Tenant hereby waives all claims based thereon.

        11.    TENANT'S INSURANCE.

           11.1 Insurance Requirement. Tenant shall procure, at its sole cost
and expense, and maintain insurance coverage in accordance with the terms
hereof, either as specific policies or within blanket policies. Coverage shall
begin on the date Tenant is given access to the Premises for any purpose and
shall continue until expiration of the Term, except as otherwise set forth in
the Lease. Insurance shall be with insurers licensed to do business in the State
of California, and acceptable to Landlord. The insurers must have a current A.M.
Best's rating of not less than A:VII, or equivalent (as reasonably determined by
Landlord) if the Best's rating system is discontinued. Tenant shall furnish
Landlord with original certificates and amendatory endorsements effecting
coverage required by this Section 11 before the date Tenant is first given
access to the Premises. All certificates and endorsements are to be received and
approved by Landlord before any work commences. Landlord reserves the right to
inspect and/or copy any insurance policy required to be maintained by Tenant
hereunder, or to require complete, certified copies of all required insurance
policies, including endorsements effecting the coverage required herein at any
time. Tenant shall comply with such requirement within thirty (30) days of
demand therefor by Landlord. Tenant shall furnish Landlord with renewal
certificates and amendments or a "binder" of any such policy at least twenty
(20) days prior to the expiration thereof. Each insurance policy required herein
shall be endorsed to state that coverage shall not be canceled or materially
modified, except after thirty (30) days prior written notice to Landlord and
Landlord's lender (if such lender's address is provided to Tenant). The
Commercial General Liability policy, as hereinafter required, shall contain, or
be endorsed to contain, the following provisions: (a) Landlord and any parties
designated by Landlord shall be covered as additional insureds as their
respective interests may appear; and (b) Tenant's insurance coverage shall be
primary insurance as to any insurance carried by the parties designated


                                       13
<PAGE>   19

as additional insureds. Any insurance or self-insurance maintained by Landlord
shall be excess of Tenant's insurance and shall not contribute with it.

           11.2 Minimum Scope of Coverage. Insurance coverage required to be
covered hereunder by Tenant shall be at least as broad as that set forth in this
Section 11.2; provided, however, if, because of Tenant's use or occupancy of the
Premises, Landlord determines, in Landlord's reasonable judgment, that
additional insurance coverage or different types of insurance are necessary,
then Tenant shall obtain such insurance at Tenant's expense in accordance with
the terms of this Section 11.2:

                  (a) Commercial General Liability (ISO occurrence form CG 00
01) which shall cover liability arising from Tenant's use and occupancy of the
Premises, its operations therefrom, Tenant's independent contractors,
products-completed operations, personal injury and advertising injury, and
liability assumed under an insured contract;

                  (b) Workers' Compensation insurance as required by law, and
Employers Liability insurance;

                  (c) Commercial Property Insurance (ISO special causes of loss
form CP 10 30) against all risk of direct physical loss or damage (including
flood, if applicable), earthquake excepted, for: (i) all Leasehold Improvements,
and (ii) trade fixtures, merchandise and Tenant's Property from time to time in,
on or about the Premises. The proceeds of such property insurance shall be used
for the repair or replacement of the property so insured. Upon termination of
this Lease following a casualty as set forth herein, the proceeds under clause
(i) above shall be paid to Landlord, and the proceeds under clause (ii) above
shall be paid to Tenant; and

                  (d)  Business Interruption and Extra Expense Insurance.

           11.3 Minimum Limits of Insurance. Tenant shall maintain limits not
less than:

                  (a) Commercial General Liability: $2,000,000 per occurrence.
If the insurance contains a general aggregate limit, either the general
aggregate limit shall apply separately to this Lease or the general aggregate
limit shall be at least twice the required occurrence limit;

                  (b) Employer's Liability: $1,000,000 per accident for bodily
injury or disease;

                  (c) Commercial Property Insurance: 100% replacement cost with
no coinsurance penalty provision.

                  (d) Business Interruption and Extra Expense Insurance: In a
reasonable amount and comparable to amounts carried by comparable tenants in
comparable projects.

           11.4 Deductible and Self-Insured Retention. Any deductible or
self-insured retention in excess of $5,000 per occurrence must be declared to
and approved by Landlord. At the option of Landlord, either the insurer shall
reduce or eliminate such deductible or self-insured retention or Tenant shall
provide separate insurance conforming to this requirement.

           11.5 Increases in Insurance Policy Limits. If the coverage limits set
forth in this Section 11 are deemed inadequate by Landlord or Landlord's lender,
then Tenant shall increase the coverage limits to the amounts reasonably
recommended by either Landlord or Landlord's lender. Landlord agrees that any
such required increases in coverage limits shall not occur more frequently than
once every three (3) years.

           11.6 Waiver of Subrogation. Notwithstanding anything to the contrary
contained herein, to the extent of insurance proceeds received with respect to a
loss, Landlord and Tenant each hereby waive any right of recovery against the
other party and against any other party maintaining a policy of insurance with
respect to the Building or any portion thereof or the contents of any of the
same, for any loss or damage covered by insurance maintained by such other party
with respect to the Building or the Premises or any portion of any thereof or
the contents of the same or any operation therein, whether or not such loss is
caused by the fault or negligence of such other party. If any policy of
insurance relating to the Premises carried by Tenant does not permit the
foregoing waiver or if the coverage under any such policy would be invalidated
as a result of such waiver, Tenant shall obtain from the insurer under such
policy a waiver of all rights of subrogation the insurer might have against
Landlord or


                                       14
<PAGE>   20

any other party maintaining a policy of insurance covering the same loss, in
connection with any claim, loss or damage covered by such policy.

           11.7 Landlord's Right to Obtain Insurance for Tenant. If Tenant fails
to obtain the insurance coverage or fails to provide certificates and
endorsements as required by this Lease, Landlord may, at its option, obtain such
insurance for Tenant. Tenant shall pay, as Additional Rent, the reasonable cost
thereof together with a service charge as determined by Landlord.

        12.    DAMAGE OR DESTRUCTION.

           12.1 Damage. If, during the Term of this Lease, the Premises or the
portion of the Building necessary for Tenant's occupancy is damaged by fire or
other casualty covered by fire and extended coverage insurance carried by
Landlord, Landlord shall promptly repair the damage provided (a) such repairs
can, in Landlord's opinion, be completed, under applicable laws and regulations,
within one hundred eighty (180) days of the date a permit for such construction
is issued by the governing authority, (b) insurance proceeds are available to
pay for the entire cost of restoration, and (c) Tenant performs its obligations
pursuant to Section 12.4 below. In such event, this Lease shall continue in full
force and effect, except that if such damage is not the result of the negligence
or willful misconduct of Tenant or a Tenant Party, Tenant shall be entitled to a
proportionate reduction of Rent to the extent Tenant's use of the Premises is
impaired, commencing with the date of damage and continuing until completion of
the repairs required of Landlord under Section 12.4. If the damage is due to the
fault or neglect of Tenant or a Tenant Party, and loss of rental income
insurance is denied as a result, there shall be no abatement of Rent.

           12.2 Damage During Last Twelve Months of Term. Notwithstanding
anything contained in the Lease to the contrary, in the event of partial or
total damage or destruction of the Premises during the last twelve (12) months
of the Term, either party shall have the option to terminate this Lease upon
thirty (30) days prior notice to the other party, provided such notice is served
within thirty (30) days after the date of occurrence of such damage or
destruction. For purposes of this Section 12.2, "partial damage or destruction"
shall mean the damage or destruction of at least thirty-three and one-third
percent (33 1/3%) of the Premises, as determined by Landlord in Landlord's
reasonable discretion.

           12.3 Repair of Premises in Excess of One Hundred Eighty Days. If in
Landlord's opinion, repairs to the Premises or portion of the Building necessary
for Tenant's occupancy cannot be completed under applicable laws and regulations
within one hundred eighty (180) days of the date a permit for such construction
is issued by the governing authority, Landlord may elect, upon notice to Tenant
given within thirty (30) days after the date of such fire or other casualty, to
repair such damage, in which event this Lease shall continue in full force and
effect, but Rent shall be partially abated subject to and as provided in Section
12.1. If Landlord does not so elect to make such repairs, this Lease shall
terminate as of the date of such fire or other casualty.

           12.4 Tenant Repair. If the Premises are to be repaired under this
Section 12, Landlord shall repair at its cost any injury or damage to the
Building. Notwithstanding anything contained herein to the contrary, Landlord
shall not be obligated to perform work other than Landlord's Work performed
previously pursuant to Section 9.1 above. Tenant shall be responsible at its
sole cost and expense for the repair, restoration and replacement of any other
Leasehold Improvements and Tenant's Property. Landlord shall not be liable for
any loss of business, inconvenience or annoyance arising from any repair or
restoration of any portion of the Premises or Building as a result of any damage
from fire or other casualty.

           12.5 Express Agreement. This Lease shall be considered an express
agreement governing any case of damage to or destruction of the Premises or
Building by fire or other casualty, and any present or future law which purports
to govern the rights of Landlord and Tenant in such circumstances in the absence
of an express agreement shall have no application. Tenant hereby waives the
provisions of Section 1932, subdivision 2, and Section 1933, subdivision 4, of
the Civil Code of California, or any similar law, statute or ordinance now or
thereafter in effect.

        13.    EMINENT DOMAIN.


                                       15
<PAGE>   21

           13.1 Whole Taking. If the whole of the Building or Premises is
lawfully taken by condemnation or in any other manner for any public or
quasi-public purpose, this Lease shall terminate as of the date of such taking,
and Rent shall be prorated to such date.

           13.2 Partial Taking. If less than the whole of the Building or
Premises is so taken, this Lease shall be unaffected by such taking, provided
that (a) Tenant shall have the right to terminate this Lease by notice to
Landlord given within ninety (90) days after the date of such taking if twenty
percent (20%) or more of the Premises is taken and the remaining area of the
Premises is not reasonably sufficient for Tenant to continue operation of its
business, and (b) Landlord shall have the right to terminate this Lease by
notice to Tenant given within ninety (90) days after the date of such taking. If
either Landlord or Tenant so elects to terminate this Lease, the Lease shall
terminate on the thirtieth (30th) calendar day after a party's receipt of such
notice. Rent shall be prorated to the date of termination. If this Lease
continues in force upon such partial taking, Base Rent and Tenant's
Proportionate Share shall be equitably adjusted.

           13.3 Proceeds. In the event of any taking, partial or whole, all of
the proceeds of any award, judgment or settlement payable by the condemning
authority shall be the exclusive property of Landlord, and Tenant hereby assigns
to Landlord all of its right, title and interest in any award, judgment or
settlement from the condemning authority; provided, however, that Tenant shall
have the right, to the extent that Landlord's award is not reduced or
prejudiced, to claim from the condemning authority (but not from Landlord) such
compensation as may be recoverable by Tenant in its own right for relocation
expenses and damage to Tenant's Property and damage to Leasehold Improvements
installed at the sole expense of Tenant.

           13.4 Landlord's Restoration. In the event of a partial taking of the
Premises which does not result in a termination of this Lease, Landlord shall
restore the remaining portion of the Premises as nearly as practicable to its
condition prior to the condemnation or taking; provided however, Landlord shall
not be obligated to perform work other than Landlord's Work performed previously
pursuant to Section 9.1 above. Tenant shall be responsible at its sole cost and
expense for the repair, restoration and replacement of Tenant's Property and any
other Leasehold Improvements.

        14. ASSIGNMENT AND SUBLETTING. No assignment of this Lease by Tenant or
sublease of all or any part of the Premises shall be permitted, except as
provided in this Section 14.

           14.1   No Assignment or Subletting.

               14.1.1 Tenant shall not hypothecate or encumber this Lease or any
interest herein without the prior written consent of Landlord, which may be
granted or denied in Landlord's absolute discretion. Tenant shall not, without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld by Landlord, transfer or assign this Lease or any interest herein,
sublet the Premises or any part thereof, or permit the use of the Premises by
any party other than Tenant. This Lease shall not, nor shall any interest
herein, be assignable as to the interest of Tenant by operation of law without
the consent of Landlord, which consent shall not be unreasonably withheld. Any
of the foregoing acts without such consent shall be void and shall, at the
option of Landlord, terminate this Lease. In connection with each consent
requested by Tenant, Tenant shall submit to Landlord the terms of the proposed
transaction (including calculation of the "Transfer Consideration" described in
Section 14.5 below), the proposed effective date of the transfer (which shall
not be less than thirty (30) days nor more than one hundred eighty (180) days
after Tenant's request for consent), the identity of the parties to the
transaction, current financial statements of the proposed assignee or sublessee
certified by an officer, partner or owner thereof, business credit and personal
references and history of the proposed assignee or sublessee and any other
information reasonably required by Landlord which will enable Landlord to
determine the financial responsibility, character, and reputation of the
proposed assignee or sublessee and the nature of such assignee's or sublessee's
business, the proposed documentation for the transaction, and all other
information reasonably requested by Landlord concerning the proposed transaction
and the parties involved.

               14.1.2 If the Tenant is a privately held corporation, or is an
unincorporated association or partnership or limited liability company, or any
other entity, the transfer, assignment, or hypothecation of any stock or
interest in such corporation, association, partnership or other entity in excess
of twenty-five percent (25%) in the aggregate from the ownership existing as of
the date of this Lease shall be deemed an assignment or transfer within


                                       16
<PAGE>   22

the meaning and provisions of this Section 14. If Tenant is a publicly held
corporation, the public trading of stock in Tenant shall not be deemed an
assignment or transfer within the meaning of this Section 14.1.2.

           14.2 Landlord's Consent. Without limiting the other instances in
which it may be reasonable for Landlord to withhold its consent to an assignment
or subletting, Landlord and Tenant acknowledge that it shall be reasonable for
Landlord to withhold its consent in the following instances:

                  (a) if at the time consent is requested, or at any time prior
to the granting of consent, Tenant is in default under this Lease or would be in
default under this Lease but for the pendency of any grace or cure period under
Section 15.1 below;

                  (b) if the proposed assignee or sublessee is a governmental
agency;

                  (c) if, in Landlord's reasonable judgment, the use of the
Premises by the proposed assignee or sublessee would not be comparable to the
type or character of office use by other tenants in the Building, would entail
any alterations which would lessen the value of the leasehold improvements in
the Premises, or would conflict with any so-called "exclusive" or percentage
lease then in favor of another tenant of the Building;

                  (d) if, in Landlord's reasonable judgment, the financial worth
of the proposed assignee or sublessee does not meet the credit standards applied
by Landlord for other tenants under leases with comparable terms, or the
character, reputation, or business of the proposed assignee or sublessee is not
consistent with the quality of the other tenants in the Building;

                  (e) in Landlord's reasonable judgment, the proposed assignee
or subtenant does not have a good reputation as a tenant of property, or if
Landlord has experienced previous defaults by or is in litigation with the
proposed assignee or subtenant

                  (f) if in case of subletting, such subletting is of less than
the entire Premises;

                  (g) if the proposed assignee or sublessee is an existing
tenant of the Building;

                  (h) whether the proposed assignee's or sublessee's use of the
Premises will include the use of Hazardous Material, or will in any way increase
any risk to Landlord relating to Hazardous Material; and

                  (i) the proposed assignment or sublease fails to include all
of the terms and provisions required to be included therein pursuant to this
Section 14.

           14.3 If, at any time during the Term of this Lease, Tenant desires to
assign its interest in this Lease or sublet all or any part of the Premises,
Tenant shall give notice to Landlord setting forth the terms of the proposed
assignment or subletting ("Tenant's Notice"). Landlord shall have the option,
exercisable by notice given to Tenant within thirty (30) days after Tenant's
Notice is given ("Landlord's Option Period"), either (a) to consent to the
assignment, in which event the provisions of Section 14.5 below shall be
applicable, or to consent to the subletting in which event the provisions of
Section 14.6 below shall be applicable; (b) in the event of a proposed
assignment, to terminate this Lease and to retake possession of the Premises;
(c) in the event of a proposed subletting of the entire Premises, or a portion
of the Premises for all or substantially all of the remainder of the term, to
terminate this Lease with respect to, and to retake possession of, the space in
question, together with, if only a portion of the Premises is involved, such
rights of access to and from such portion as may be reasonably required for its
use and enjoyment; or (d) to disapprove the proposed assignment or subletting.

           14.4 No sublessee shall have a right further to sublet without
Landlord's prior consent, which Tenant acknowledges may be withheld in
Landlord's absolute discretion, and any assignment by a sublessee of its
sublease shall be subject to Landlord's prior consent in the same manner as if
Tenant were entering into a new sublease. No sublease, once consented to by
Landlord, shall be modified or terminated by Tenant without Landlord's prior
consent, which consent shall not be unreasonably withheld.

           14.5 In the case of an assignment other than to a Permitted
Transferee (as defined in Section 14.10 below), seventy-five percent (75%) of
any sums above the rate paid by Tenant, or any other Transfer Consideration


                                       17
<PAGE>   23

(defined below) received by Tenant as a result of such assignment, shall be paid
to Landlord. "Transfer Consideration" shall mean all monies, property and other
consideration of every kind whatsoever paid or payable to Tenant for the
assignment or subletting, and for all property transferred as all or part of the
consideration including, without limitation, fixtures and other Tenant
improvements, but excluding Tenant's Property. For purposes of this Section 14
only, the term "Tenant's Property" shall be deemed to include goodwill and any
other intangible personal property associated with Tenant's business, but in no
event shall it be deemed to include Tenant's interest under this Lease.

           14.6 In the case of a subletting other than to a Permitted
Transferee, seventy-five percent (75%) of any sums or any other Transfer
Consideration received by Tenant as a result of such subletting shall be paid to
Landlord after first deducting (a) the rental due hereunder, prorated to reflect
only rental allocable to the sublet portion of the Premises.

           14.7 Regardless of Landlord's consent and regardless of whether
Landlord's consent is required pursuant to the terms hereof, no subletting or
assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the rental and to perform all other obligations to be
performed by Tenant hereunder. The acceptance of rental by Landlord from any
other person shall not be deemed to be a waiver by Landlord of any provision
hereof. Consent to one assignment or subletting shall not be deemed consent to
any subsequent assignment or subletting. In the event of default by any assignee
of Tenant or any successor of Tenant in the performance of any of the terms
hereof, Landlord may proceed directly against Tenant without the necessity of
exhausting remedies against such assignee or successor. Landlord may consent to
subsequent assignments or subletting of this Lease or amendments or
modifications to this Lease with assignees of Tenant, without notifying Tenant,
or any successor of Tenant, and without obtaining its or their consent thereto,
and such action shall not relieve Tenant of liability under this Lease.

           14.8 In the event Tenant shall assign this Lease or sublet the
Premises or request the consent of Landlord to any assignment, subletting,
hypothecation or other action requiring Landlord's consent hereunder, the Tenant
shall pay Landlord's reasonable and standard processing fee (which currently is
Seven Hundred Fifty Dollars ($750.00)) in each instance and Landlord's
reasonable attorneys' fees and costs incurred in connection therewith. In no
event shall any of these costs be reimbursable to Tenant.

           14.9 Notwithstanding anything to the contrary contained herein, any
and all unexercised options to extend or renew the term of the Lease or to
expand the Premises and any and all rights of first refusal and similar rights
are intended by both Landlord and Tenant to be personal to the original Tenant
and are not intended to benefit any assignee or sublessee hereunder. Upon any
assignment or subletting of the Premises or any portion thereof, any such
options or rights shall automatically and without any further action by Landlord
terminate and be of no further force and effect.

           14.10 The provisions of Sections 14.1 and 14.3 above notwithstanding,
no consent by Landlord shall be required for an assignment or sublease by Tenant
to a Tenant Affiliate or Tenant Successor (a "Permitted Transfer" to a
"Permitted Transferee"), provided, that, any such assignment or subletting to a
Tenant Affiliate or Tenant Successor shall be subject to the following
conditions:

                  (a) Tenant shall furnish Landlord written notice of the
assignment or subletting, the identity of the assignee or sublessee, and current
financial statements of the proposed assignee or sublessee certified by an
officer, partner or owner thereof at least thirty (30) days prior to the
effective date of such assignment or subletting;

                  (b) Tenant shall furnish Landlord with a fully-executed copy
of the sublease or assignment instrument, if any, and, with respect to any and
all assignments (whether to an Tenant Affiliate or a Tenant Successor), Tenant
shall furnish Landlord with a fully-executed copy of an instrument in writing,
in form and substance satisfactory to Landlord, pursuant to which the assignee
assumes all of the obligations and liabilities accruing from and after such
assignment and imposed upon Tenant herein or arising hereunder;

                  (c) at the time of the proposed assignment or subletting,
Tenant shall not be in default under this Lease or would be in default under
this Lease but for the pendency of any grace or cure period under Section 15.1
below.


                                       18
<PAGE>   24

           In no event shall a subletting or assignment to a Permitted
    Transferee release or relieve Tenant of any of its obligations under this
    Lease. For purposes hereof, (i) "Tenant Affiliate" shall mean any
    corporation, partnership or other entity which controls, is controlled by or
    is under common control with Tenant; (ii) "Tenant Successor" shall mean any
    entity which results from a merger or consolidation or any other
    non-bankruptcy reorganization with Tenant or any entity which acquires all
    or substantially all of the stock of Tenant, provided that such entity must
    have a tangible net worth of at least one hundred fifty percent (150%) of
    the tangible net worth of Tenant at the time of such assignment; and (iii)
    "control" in this context shall mean the right directly or indirectly to
    exercise in excess of fifty percent (50%) of the voting or governing power
    of an entity.

        15.    DEFAULT.

           15.1 Tenant's Default. The occurrence of any one or more of the
following events shall constitute a default and breach of this Lease by Tenant.

               15.1.1 If Tenant abandons or vacates the Premises.

               15.1.2 If Tenant fails to pay any Rent or Additional Rent or any
other charges required to be paid by Tenant under this Lease and such failure
continues for a period of five (5) days after such payment was due; provided,
however, that the obligation of Tenant to pay late charges or interest pursuant
to Section 4 above shall be calculated and commence as of the due date for such
Rent or Additional Rent or other charges and not on the expiration of such five
(5) day period.

               15.1.3 If Tenant fails to promptly and fully perform any other
covenant, condition or agreement contained in this Lease and such failure
continues for thirty (30) days after notice thereof from Landlord to Tenant, or,
if such default cannot reasonably be cured within thirty (30) days, if Tenant
fails to commence to cure within fifteen (15) days after notice thereof from
Landlord and thereafter diligently proceeds to rectify and cure such default in
as expeditious a manner as is reasonably possible.

               15.1.4 Tenant's failure to provide any document, instrument or
assurance as required under this Lease if the failure continues for three (3)
days after receipt of notice from Landlord to Tenant.

               15.1.5 Any Sublease or Assignment that is not in compliance with
Section 14 of this Lease.

               15.1.6 Tenant's failure to reinstate the Security Deposit or
increase the Security Deposit in compliance with Section 5 of this Lease.

               15.1.7 To the extent provided by law:

                      15.1.7.1 If a writ of attachment or execution is levied on
this Lease or on substantially all of Tenant's Property; or

                      15.1.7.2 If Tenant makes a general assignment for the
benefit of creditors; or

                      15.1.7.3 If Tenant files a voluntary petition for relief
or if a petition against Tenant in a proceeding under the federal bankruptcy
laws or other insolvency laws is filed and not withdrawn or dismissed within
sixty (60) days thereafter, or if under the provisions of any law providing for
reorganization or winding up of business entities, any court of competent
jurisdiction assumes jurisdiction, custody or control of Tenant or any
substantial part of its property and such jurisdiction, custody or control
remains in force unrelinquished, unstayed or unterminated for a period of sixty
(60) days; or

                      15.1.7.4 If in any proceeding or action in which Tenant is
a party, a trustee, receiver, agent or custodian is appointed to take charge of
the Premises or Tenant's Property (or has the authority to do so); or

                      15.1.7.5 If Tenant is a partnership or consists of more
than one (1) person or entity, if any partner of the partnership or other person
or entity is involved in any of the acts or events described in this Section
15.1.7.


                                       19
<PAGE>   25

                      15.1.7.6 If Tenant's Guarantor, if any, is involved in any
of the acts or events described in this Section 15.1.7.

           15.2 Landlord Remedies. Upon the occurrence of a default by Tenant
which is not cured by Tenant within the applicable grace period, if any,
specified in Section 15.1 above, Landlord shall have the following rights and
remedies in addition to all other rights or remedies available to Landlord at
law or in equity:

                  (a) The rights and remedies provided by California Civil Code
Section 1951.2, including, but not limited to, the right to terminate Tenant's
right to possession of the Premises and to recover the worth at the time of
award of the amount by which the unpaid Base Rent and Additional Rent for the
balance of the Term after the time of award exceeds the amount of rental loss
for the same period that the Tenant proves could be reasonably avoided, as
computed pursuant to subsection (b) of said Section 1951.2.

                  (b) The rights and remedies provided by California Civil Code
Section 1951.4 ("Landlord may continue lease in effect after Tenant's breach and
abandonment and recover rent as it becomes due, if Tenant has right to sublet or
assign, subject only to reasonable limitations"), which allows Landlord to
continue this Lease in effect and to enforce all of its rights and remedies
under this Lease, including the right to recover rent as it becomes due, for so
long as Landlord does not terminate Tenant's right to possession; acts of
maintenance or preservation, efforts to relet the Premises or the appointment of
a receiver upon Landlord's initiative to protect its interest under this Lease
shall not constitute a termination of Tenant's right to possession. If Landlord
exercises its rights under California Civil Code Section 1951.4, Landlord as
attorney-in-fact for Tenant may from time to time sublet the Premises or any
part thereof for such term or terms (which may extend beyond the Term) and at
such rent and upon such other terms as Landlord in its sole discretion may deem
advisable, with the right to make alterations and repairs to the Premises. Upon
each such subletting, Tenant shall be immediately liable for payment to Landlord
of, in addition to Base Rent and Additional Rent due hereunder, the cost of such
subletting and such alterations and repairs incurred by Landlord and the amount,
if any, by which the Base Rent and Additional Rent owing hereunder for the
period of such subletting (to the extent such period does not exceed the Term)
exceeds the amount to be paid as Base Rent and Additional Rent for the Premises
for such period pursuant to such subletting. For all purposes set forth in this
subsection (b), Landlord is hereby irrevocably appointed attorney-in-fact for
Tenant, with power of substitution. No taking possession of the Premises by
Landlord as attorney-in-fact for Tenant shall be construed as an election on
Landlord's part to terminate this Lease or Tenant's right to possession unless a
written notice of such intention is given to Tenant. No action taken by Landlord
pursuant to this subsection (b) shall be deemed a waiver of any default by
Tenant and, notwithstanding any such subletting without termination, Landlord
may at any time thereafter elect to terminate this Lease for such previous
default.

                  (c) The right to have a receiver appointed for Tenant upon
application by Landlord to take possession of the Premises and to apply any
rental collected from the Premises and to exercise all other rights and remedies
granted to Landlord as attorney-in-fact for Tenant pursuant to subsection (b)
above.

           15.3 Landlord's Right to Cure Tenant's Default. If Tenant defaults in
the performance of any of its obligations under this Lease and Tenant has not
timely cured the default after notice, Landlord may (but shall not be obligated
to), without waiving such default, perform the same for the account and at the
expense of Tenant. Tenant shall pay Landlord as Additional Rent all costs of
such performance immediately upon written demand therefor, and if paid at a
later date these costs shall bear interest at the maximum rate permitted by law
to be charged by an individual.

           15.4 Mortgagee Protection. Tenant agrees to send by certified or
registered mail to any first mortgagee or first deed of trust beneficiary of
Landlord whose address has been furnished to Tenant, a copy of any notice of
default served by Tenant on Landlord. If Landlord fails to cure such default
within the time provided for in this Lease, then such mortgagee or beneficiary
shall have such additional time to cure the default as is reasonably necessary
under the circumstances.

        16. WAIVER. No delay or omission in the exercise of any right or remedy
of either party hereunder upon any default by the other party hereto shall
impair such right or remedy or be construed as a waiver of such default. Any
waiver by either party hereunder of any default must be in writing and shall not
be a waiver of any other default concerning the same or any other provision of
this Lease. The receipt and acceptance by Landlord of delinquent Rent shall not
constitute a waiver of any other default: it shall constitute only a waiver of
timely payment


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<PAGE>   26

for the particular Rent payment involved (excluding the collection of a late
charge or interest). No act or conduct of Landlord, including, without
limitation, the acceptance of keys to the Premises, shall constitute an
acceptance of the surrender of the Premises by Tenant before the expiration of
the Term. Only written acknowledgement from Landlord to Tenant shall constitute
acceptance of the surrender of the Premises and accomplish a termination of this
Lease. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by Tenant.

        17.    SUBORDINATION NONDISTURBANCE AND ATTORNMENT.

           17.1 Without the necessity of any additional document, this Lease
shall be subject and subordinate at all times to: (a) all reciprocal easement
agreements and all ground leases or underlying leases which may now exist or
hereafter be executed affecting the Building or the Real Property or both, and
(b) the lien of any mortgage or deed of trust which may now exist or hereafter
be executed in any amount for which the Building, Real Property, ground leases
or underlying leases, or Landlord's interest or estate in any of said items, is
specified as security. Notwithstanding the foregoing, Landlord shall have the
right to subordinate or cause to be subordinated to this Lease any of the items
referred to in clause (a) or (b) above. In the event that any ground lease or
underlying lease terminates for any reason or any mortgage or deed of trust is
foreclosed or a conveyance in lieu of foreclosure is made for any reason,
Tenant, provided its rights to the Premises shall not be disturbed, shall,
notwithstanding any subordination, attorn to and become the tenant of the
successor in interest to Landlord, at the option of such successor in interest.
Tenant expressly waives the effect of any current or future statute, rule or law
which may give or purport to give Tenant any right or election to terminate the
Lease if any foreclosure proceeding or sale occurs. The provisions of this
Section 17 shall be self-operative and no further instrument shall be required;
provided, however, Tenant covenants and agrees if requested to execute and
deliver an attornment agreement, in a form customarily used by the applicable
lienholder, and any other additional documents evidencing the priority or
subordination of this Lease with respect to ground leases, underlying leases,
reciprocal easement agreements or similar documents or instruments, or the lien
of any such mortgage or deed of trust.

           17.2 Landlord's title is and always shall be paramount to the title
of the Tenant and nothing contained in this Lease shall empower the Tenant to do
any act which can, shall or may encumber the title of the Landlord.

        18.    TENANT ESTOPPEL CERTIFICATES.

           18.1 Landlord Request for Estoppel Certificate. Within ten (10) days
after written request from Landlord, Tenant shall execute and deliver to
Landlord or Landlord's designee, in the form requested by Landlord, a written
statement certifying, among other things, (a) that this Lease is unmodified and
in full force and effect, or that it is in full force and effect as modified and
stating the modifications; (b) the amount of Base Rent and the date to which
Base Rent and Additional Rent have been paid in advance; (c) the amount of any
security deposited with Landlord; (d) that Landlord is not in default hereunder
or, if Landlord is claimed to be in default, stating the nature of any claimed
default; and (e) such other matters as Landlord may reasonably request. Any such
statement may be conclusively relied upon by a prospective purchaser, assignee
or encumbrancer of the Premises.

           18.2 Failure to Execute. Tenant's failure to execute and deliver such
statement within the time required shall be a default under this Lease and shall
also be conclusive upon Tenant that: (a) this Lease is in full force and effect
and has not been modified except as represented by Landlord; (b) there are no
uncured defaults in Landlord's performance and that Tenant has no right of
offset, counter-claim or deduction against Rent; and (c) not more than one
month's Rent has been paid in advance.

        19. NOTICE. Any notice hereunder shall be in writing and shall be deemed
duly served or given if personally delivered, or sent by certified or registered
U.S. Mail, postage prepaid with a return receipt requested, or sent by overnight
courier service that guarantees next day delivery, fee prepaid with a return
receipt requested, or by facsimile with a confirmation receipt (and a copy sent
by a commercial overnight courier that guarantees next day delivery), as
follows: (a) if to Landlord, to Landlord's Address for Notice with a copy to the
Building manager, and (b) if to Tenant, to Tenant's Address for Notice;
provided, however, notices to Tenant shall be deemed duly served or given if
delivered or sent to Tenant at the Premises. Landlord and Tenant may from time
to time by notice to the other designate another place for receipt of future
notice. Notwithstanding anything contained herein to the contrary, when an
applicable state statute requires service of notice in a particular manner,
service of that notice in


                                       21
<PAGE>   27

accordance with those particular requirements shall replace rather than
supplement any notice requirement set forth in this Lease.

        20. TRANSFER OF LANDLORD'S INTEREST. In the event of any sale or
transfer by Landlord of the Premises or Building, and assignment of this Lease
by Landlord, Landlord shall be and is hereby entirely freed and relieved of any
and all liability and obligations contained in or derived from this Lease
arising out of any act, occurrence or omission relating to the Premises,
Building, or Lease occurring after the consummation of such sale or transfer,
provided the purchaser shall expressly assume all of the covenants and
obligations of Landlord under this Lease. This Lease shall not be affected by
any such sale and Tenant agrees to attorn to the purchaser or assignee provided
all of Landlord's obligations hereunder are assumed by such transferee. If any
security deposit or prepaid Rent has been paid by Tenant, Landlord shall
transfer the security deposit and prepaid Rent to Landlord's successor, and upon
such transfer, Landlord shall be relieved of any and all further liability with
respect thereto.

        21.    SURRENDER OF PREMISES.

           21.1 Clean and Same Condition. Upon the Expiration Date or earlier
termination of this Lease, Tenant shall peaceably surrender the Premises to
Landlord clean and in the same condition as when received, except for reasonable
wear and tear, loss by fire or other casualty, and loss by condemnation. Tenant
shall remove Tenant's Property no later than the Expiration Date. If Tenant is
required by Landlord to remove any Leasehold Improvements under Section 9.5
above, Tenant shall complete such removal no later than the Expiration Date. Any
damage to the Premises, including, without limitation, any structural damage,
resulting from removal of any Leasehold Improvements and/or from Tenant's use or
from the removal of Tenant's Property pursuant to Section 9.6 above shall be
repaired (in accordance with Landlord's reasonable direction) no later than the
Expiration Date by Tenant at Tenant's sole cost and expense. On the Expiration
Date, Tenant shall surrender all keys to the Premises.

           21.2 Property Abandoned. If Tenant abandons or surrenders the
Premises, or is dispossessed by process of law or otherwise, any of Tenant's
Property left on the Premises shall be deemed to be abandoned, and, at
Landlord's option, title shall pass to Landlord under this Lease as by a bill of
sale. If Landlord elects to remove all or any part of such Tenant's Property,
the cost of removal, including repairing any damage to the Premises or Building
caused by such removal, shall be paid by Tenant.

        22.    HOLDING OVER.

           22.1 Holding Over with Landlord's Permission. Tenant shall not occupy
the Premises after the Expiration Date without Landlord's prior written consent.
If after expiration of the Term, Tenant remains in possession of the Premises
with Landlord's permission, Tenant shall become a tenant from month-to-month
only upon all the provisions of this Lease (except as to the Term and Base
Rent). Monthly Installments of Base Rent payable by Tenant during this period
shall be increased to one hundred fifty percent (150%) of the Monthly
Installments of Base Rent payable by Tenant in the final month of the Term. The
tenancy may be terminated by either party by delivering a thirty (30) day notice
to the other party. Nothing contained in this Section 22.1 shall be construed to
limit or constitute a waiver of any other rights or remedies available to
Landlord pursuant to this Lease or at law or in equity.

           22.2 Holding Over without Landlord's Permission. Any holding over
after the expiration of the Term without Landlord's prior written consent shall:
(a) constitute a default by Tenant under this Lease without notice or cure
period; (b) automatically increase the Monthly Installments of Base Rent to two
hundred percent (200%) of the then prevailing monthly rental payable by Tenant
at the expiration of the Term of this Lease; and (iii) entitle Landlord to
exercise any or all of its remedies as provided in this Lease or at law or in
equity, notwithstanding that Landlord may elect to accept one or more payments
of Rent and/or any Additional Rent from Tenant. Tenant agrees to indemnify
Landlord and any replacement tenant against and save Landlord and any
replacement tenant harmless from any and all loss, cost, liability, damage and
expense, including, without limitation, reasonable attorneys' fees and costs,
incurred in connection with or arising from Tenant's failure to timely vacate
the Premises pursuant to the terms and conditions of this Lease.

        23. RULES AND REGULATIONS. Tenant agrees to comply with (and cause
Tenant Parties to comply with) the rules and regulations attached hereto as
Exhibit "E" and with such reasonable modifications thereof and additions thereto
as Landlord may from time to time make. Landlord agrees to enforce the rules and


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<PAGE>   28

regulations in a non-discriminatory manner. Landlord shall not be liable,
however, for any violation of said rules and regulations by other tenants or
occupants of the Building.

        24. CERTAIN RIGHTS RESERVED BY LANDLORD. Landlord reserves the following
rights, exercisable without liability to Tenant for damage or injury to
property, person or business; which acts shall not be deemed to constitute
either an actual or constructive eviction of Tenant from the Premises or to be
deemed to have disturbed Tenant's use or possession of the Premises:

               (a) Name. To name the Building and to change the name or street
address of the Building.

               (b) Signage. To install and maintain all signs on the exterior
and interior of the Building.

               (c) Access. To have pass keys to the Premises and all doors
within the Premises, excluding Tenant's files, vaults and safes.

               (d) Physical Changes. To make alterations, additions, repairs or
improvements to or in or to decrease the size or area of all or any part of the
Building, the fixtures and equipment therein and the arcades, plazas and
walkways outside the Building, including, without limitation, the HVAC,
plumbing, electrical, fire protection, life safety, security and other
mechanical, electrical and communications systems of the Building, the Common
Area and all other parts of the Building, and to change the arrangement and/or
location of entrances or passageways, doors and doorways, corridors, elevators,
stairs, toilets and other public parts of the Building.

               (e) Inspection. At any time during the Term, and on prior
telephonic notice to Tenant, to inspect the Premises, and to show the Premises
to any person having an existing or prospective interest in the Building or
Landlord, and during the last twelve (12) months of the Term, to show the
Premises to prospective tenants thereof.

               (f) Entry. To enter the Premises for the purpose of making
inspections, repairs, alterations, additions or improvements to the Premises or
the Building (including, without limitation, checking, calibrating, adjusting or
balancing controls and other parts of the HVAC), and to take all steps as may be
necessary or desirable for the safety, protection, maintenance or preservation
of the Premises or the Building or Landlord's interest therein, or as may be
necessary or desirable for the operation or improvement of the Building or in
order to comply with laws, orders or requirements of governmental or other
authority. Landlord shall give Tenant prior notice of its intent to enter the
Premises and agrees to use commercially reasonable efforts (except in an
emergency) to minimize interference with Tenant's business in the Premises in
the course of any such entry.

               (g) Common Area Regulation. To exclusively regulate and control
use of the public or Common Area of the Building or Real Property.

        25. ADVERTISEMENTS AND SIGNS. Tenant shall not have the right to place,
construct, or maintain on or about the Premises, the Building of which the
Premises are a part, or the Common Areas, or other locations of the Real
Property, or in any interior portions of the Premises or Building that may be
visible from the exterior of the Building, signs, names, insignia, exterior
lights, decorations, balloons, flags, pennants, banners, or painting or any
other similar item including without limitation, windows or door lettering,
placards, decorations, or advertising media of any type which can be viewed from
the exterior of the Premises or the Building (collectively, "Signs"), without
Landlord's prior written consent, which consent may be withheld in Landlord's
sole discretion. Tenant shall comply, at its sole cost and expense, with any and
all laws, statutes, ordinances and governmental rules, regulations or
requirements applicable to such signage. Tenant shall have the obligation to
remove all Signs prior to the expiration of the Term of this Lease. Landlord
shall have the right to remove any Signs or other matter installed without
Landlord's permission, without being liable to Tenant by reason of such removal,
and to charge the cost of removal to Tenant as Additional Rent hereunder,
payable within ten (10) days of written demand by Landlord.

        26. RELOCATION OF PREMISES. Landlord shall have the right to relocate
the Premises to another part of the Building at any time after the execution and
delivery of the Lease upon at least thirty (30) days prior notice to Tenant. The
new premises shall be similar in size to the Premises described in this Lease
and shall be leased to Tenant on the same terms and conditions as provided in
the Lease, except that if the new premises contains less square footage, then
there shall be a proportionate adjustment in Rent and if it contains more square
footage there shall be no adjustment in Rent. Landlord shall pay reasonable and
customary expenses incurred moving


                                       23
<PAGE>   29

Tenant's Property to the new premises. Upon completion of such relocation, the
new premises shall be the Premises for all purposes under the Lease and the
parties shall immediately execute an amendment to this Lease setting forth the
relocation of the Premises and the modification of Rent, if any.

        27. FORCE MAJEURE. Any prevention, delay or stoppage of work to be
performed by Landlord or Tenant which is due to strikes, labor disputes,
inability to obtain labor, materials, equipment or reasonable substitutes
therefor, acts of God, governmental restrictions or regulations or controls,
judicial orders, enemy or hostile government actions, civil commotion, fire or
other casualty, or other causes beyond the reasonable control of the party
obligated to perform hereunder (except with respect to Tenant's inability to
satisfy any of its monetary obligations hereunder), shall excuse performance of
the work by that party for a period equal to the duration of that prevention,
delay or stoppage. No such inability or delay by Landlord shall constitute an
actual or constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of Base Rent or Additional Rent, or relieve Tenant from
any of its obligations under this Lease, or impose any liability upon Landlord
or its agents by reason of inconvenience, annoyance, interruption, injury or
loss to or interference with Tenant's business or use and occupancy or quiet
enjoyment of the Premises or any loss or damage occasioned thereby. Tenant
hereby waives and releases any right to terminate this Lease under Section
1932(1) of the California Civil Code or under any similar law, statute or
ordinance now or hereafter in effect.

        28. BROKERAGE FEES. Tenant warrants and represents that it has not dealt
with any real estate broker or agent in connection with this Lease or its
negotiation except the Listing and Leasing Agent(s) set forth in Section 1.19 of
this Lease. Tenant shall indemnify, defend and hold Landlord harmless from any
cost, expense or liability (including costs of suit and reasonable attorneys'
fees) for any compensation, commission or fees claimed by any other real estate
broker or agent in connection with this Lease or its negotiation by reason of
any act of Tenant.

        29. QUIET ENJOYMENT. Tenant, upon payment of Rent and performance of all
of its obligations under this Lease, shall peaceably, quietly and exclusively
enjoy possession of the Premises without unwarranted interference by Landlord or
anyone acting or claiming through Landlord, subject to the terms of this Lease
and to any mortgage, lease, or other agreement to which this Lease may be
subordinate.

        30.    PARKING.

           30.1   Maintenance of Parking.  NOT USED

           30.2 Tenant's Parking. Tenant may park in the public garage on Salvio
Street, which is currently free of charge.

        31.    MISCELLANEOUS.

           31.1 Landlord's Liability. The term "Landlord," as used in this
Lease, shall mean only the owner or owners of the Building at the time in
question. Tenant acknowledges and agrees that the liability of Landlord with
respect to its obligations under this Lease, or arising in connection with the
ownership, operation, management, leasing, repair, renovation, alteration or any
other matter relating to the Building or the Premises, is limited to Landlord's
interest in the Building, and Tenant agrees to look solely to Landlord's
interest in the Building to satisfy any claim or judgment against or any
liability or obligation of Landlord to Tenant under this Lease. In no event
shall any partner, officer, director, employee, trustee, beneficiary, advisor,
investment manager, manager, agent, member, advisor, or shareholder of Landlord
have any personal liability to Tenant with respect to any liability or
obligation of Landlord to Tenant, and no recourse shall be had by Tenant against
any such parties or the assets of any such parties to satisfy any claim or
judgment of Tenant for Landlord's breach of any of its obligations under this
Lease.

           31.2 Accord and Satisfaction; Allocation of Payments. No payment by
Tenant or receipt by Landlord of a lesser amount than the Rent provided for in
this Lease shall be deemed to be other than on account of the earliest due Rent,
nor shall any endorsement or statement on any check or letter accompanying any
check or payment as Rent be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the balance of the Rent or pursue any other remedy provided for in this


                                       24
<PAGE>   30

Lease. In connection with the foregoing, Landlord shall have the absolute right
in its sole discretion to apply any payment received from Tenant to any account
or other payment of Tenant then not current and due or delinquent.

           31.3 Attorneys' Fees. In the event that either Landlord or Tenant
fails to perform any of its obligations under this Lease or in the event a
dispute arises concerning the meaning or interpretation of any provision of this
Lease, the defaulting party or the party not prevailing in such dispute, as the
case may be, shall pay any and all costs and expenses incurred by the other
party in enforcing or establishing its rights hereunder, including, without
limitation, court costs and reasonable counsel fees and disbursements. Any such
attorneys' fees and other expenses incurred by either party in enforcing a
judgment in its favor under this Lease shall be recoverable separately from and
in addition to any other amount included in such judgment, and such attorneys'
fees obligation is intended to be severable from the other provisions of this
Lease and to survive and not be merged into any such judgment.

           31.4 Captions and Section Numbers. The captions appearing in the body
of this Lease have been inserted as a matter of convenience and for reference
only and in no way define, limit or enlarge the scope or meaning of this Lease.
All references to Section numbers refer to Sections in this Lease.

           31.5 Changes Requested by Lender. Tenant shall not unreasonably
withhold its consent to changes or amendments to this Lease requested by the
lender on Landlord's interest, so long as such changes do not alter the basic
business terms of this Lease or otherwise materially diminish any rights or
materially increase any obligations of Tenant under this Lease.

           31.6 Choice of Law. This Lease shall be construed and enforced in
accordance with the laws of the State of California.

           31.7 Consent. Notwithstanding anything contained in this Lease to the
contrary, Tenant shall have no claim, and hereby waives the right to any claim
against Landlord for money damages, by reason of any refusal, withholding or
delaying by Landlord of any consent, approval or statement of satisfaction, and,
in such event, Tenant's only remedies therefor shall be an action for specific
performance, injunction or declaratory judgment to enforce any right to such
consent, approval or statement of satisfaction.

           31.8 Authority. If Tenant is not an individual signing on his or her
own behalf, then each individual signing this Lease on behalf of such business
entity that constitutes Tenant represents and warrants that the individual is
duly authorized to execute and deliver this Lease on behalf of the business
entity, and that this Lease is binding on Tenant in accordance with its terms.
Tenant shall, at Landlord's request, deliver a certified copy of a resolution of
its board of directors, if Tenant is a corporation, or other memorandum of
resolution if Tenant is a limited partnership, general partnership or limited
liability entity, authorizing such execution.

           31.9 Waiver of Right to Jury Trial. THE RESPECTIVE PARTIES HERETO
SHALL AND THEY HEREBY DO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER UNDER
THIS LEASE. IF LANDLORD COMMENCES ANY SUMMARY PROCEEDING AGAINST TENANT, TENANT
WILL NOT INTERPOSE ANY COUNTERCLAIM OF WHATEVER NATURE OR DESCRIPTION IN ANY
SUCH PROCEEDING (UNLESS FAILURE TO IMPOSE SUCH COUNTERCLAIM WOULD PRECLUDE
TENANT FROM ASSERTING IN A SEPARATE ACTION THE CLAIM WHICH IS THE SUBJECT OF
SUCH COUNTERCLAIM), AND WILL NOT SEEK TO CONSOLIDATE SUCH PROCEEDING WITH ANY
OTHER ACTION WHICH MAY HAVE BEEN OR WILL BE BROUGHT IN ANY OTHER COURT BY
TENANT.

           31.10 Counterparts. This Lease may be executed in multiple
counterparts, all of which shall constitute one and the same Lease.

           31.11 Execution of Lease; No Option. The submission of this Lease to
Tenant shall be for examination purposes only and does not and shall not
constitute a reservation of or option for Tenant to lease, or otherwise create
any interest of Tenant in the Premises or any other premises within the
Building. Execution of this Lease by Tenant and its return to Landlord shall not
be binding on Landlord, notwithstanding any time interval, until Landlord has in
fact signed and delivered this Lease to Tenant.


                                       25
<PAGE>   31

           31.12 Furnishing of Financial Statements; Tenant's Representations.
In order to induce Landlord to enter into this Lease, Tenant agrees that it
shall promptly furnish Landlord, from time to time, upon Landlord's written
request, financial statements reflecting Tenant's current financial condition.
Tenant represents and warrants that all financial statements, records and
information furnished by Tenant to Landlord in connection with this Lease are
true, correct and complete in all respects.

           31.13 Further Assurances. The parties agree to promptly sign all
documents reasonably requested to give effect to the provisions of this Lease.

           31.14 Prior Agreements; Amendments. This Lease and the exhibits and
addenda attached, if any, form a part of this Lease and set forth all the
covenants, promises, assurances, agreements, representations, conditions,
warranties, statements, and understandings ("Representations") between Landlord
and Tenant concerning the Premises and the Building, and there are no
Representations, either oral or written, between them other than those in this
Lease. This Lease supersedes and revokes all previous negotiations,
arrangements, letters of intent, offers to lease, lease proposals, brochures,
representations, and information conveyed, whether oral or in writing, between
the parties hereto or their respective representatives or any other person
purporting to represent Landlord or Tenant. Tenant acknowledges that it has not
been induced to enter into this Lease by any Representations not set forth in
this Lease, and that it has not relied on any such Representations. Tenant
further acknowledges that no such Representations shall be used in the
interpretation or construction of this Lease, and that Landlord shall have no
liability for any consequences arising as a result of any such Representations.
Except as otherwise provided herein, no subsequent alteration, amendment,
change, or addition to this Lease shall be binding upon Landlord or Tenant
unless it is in writing and signed by each party.

           31.15 Recording. Tenant shall not record this Lease without the prior
written consent of Landlord in its sole discretion. Tenant, upon the request of
Landlord, shall execute and acknowledge a short form memorandum of this Lease
for recording purposes.

           31.16 Severability. A final determination by a court of competent
jurisdiction that any provision of this Lease is invalid shall not affect the
validity of any other provision, and any provision so determined to be invalid
shall, to the extent possible, be construed to accomplish its intended effect.

           31.17 Successors and Assigns. Subject to the terms and conditions of
Section 14 above, this Lease shall apply to and bind the heirs, personal
representatives, and successors and assigns of the parties.

           31.18  Time Is of the Essence.  Time is of the essence of this Lease.

           31.19 Multiple Parties. Except as otherwise expressly provided
herein, if more than one person or entity is named herein as either Landlord or
Tenant, the obligations of such multiple parties shall be the joint and several
responsibility of all persons or entities named herein as such Landlord or
Tenant.

        32 ADDENDA

               32.1 Option to Renew. Tenant shall have two (2) two (2) year
options to renew all space then under lease by Tenant, upon first providing
Landlord with one hundred eighty (180) days' notice prior to the expiration
date. The annual base rent for the option term shall be the base rent then being
quoted by Landlord for comparable space in the Building as of the date of the
commencement of such option term, but in no event shall the annual base rent be
less than the Annual Base Rent, plus escalations, paid by Tenant at the
expiration of the then current Lease Term. The rights granted to Tenant
hereunder are personal to Tenant and may only be exercised by Tenant when Tenant
is in possession of the entire Premises.


                                       26
<PAGE>   32

        IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date first set forth above.


                                    LANDLORD:

                                    SALVIO PACHECO SQUARE, LLC,
                                    a California limited liability company

                                    By:JCM Partners, LLC,
                                       a Delaware limited liability company,
                                       its sole member


                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------
                                    Date:                                , 2001
                                         --------------------------------







                                   TENANT:

                                   JCM Partners, LLC,
                                   A Delaware limited liability company

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------
                                    Date:                                , 2001
                                         --------------------------------


                                       27
<PAGE>   33

                                    EXHIBIT A

                             FLOOR PLAN OF PREMISES




                                       1
<PAGE>   34

                                    EXHIBIT B

                       LEGAL DESCRIPTION OF REAL PROPERTY


The land is situated in the City of Concord, County of Contra Costa, State of
California, and is described as follows:

Parcel A, as shown on that certain map of Subdivision M.S.C. 14-82, filed
September 15, 1982 in Book 102 of Parcel Maps, at page 45, Contra Costa County
records.


                                       1
<PAGE>   35

                                    EXHIBIT C

                         COMMENCEMENT OF TERM AGREEMENT

Date         March 1, 2001

Tenant       JCM Partners, LLC
Address      2151 Salvio Street, Suite 325
             Concord, CA 94520


Re:     Commencement Letter with respect to that certain Office Lease dated as
        of the 20th day of February 2001, by and between SALVIO PACHECO SQUARE,
        LLC, a California limited liability company, as Landlord, and JCM
        Partners, a Delaware limited liability company as Tenant, for 7,533
        rentable square feet on the third (3rd) floor of the Building located at
        2151 Salvio Street, Concord, California.

Dear JCM Partners, LLC:

In accordance with the terms and conditions of the above referenced Lease,
Tenant accepts possession of the Premises and agrees:

1.      The Commencement Date of the Lease is March 1, 2001;

2.      The Rent Commencement Date of the Lease March 1, 2001;

3.      The Termination Date of the Lease is February 28, 2006.

Please acknowledge your acceptance of possession and agreement to the terms set
forth above by signing all 3 counterparts of this Commencement Letter in the
space provided and returning 2 fully executed counterparts to my attention.

Sincerely,

Cor Stam
Project Manager

Agreed and Accepted:

Tenant:    JCM Partners, LLC,
                            -
           a Delaware limited liability company

           By:
              ----------------------------------

           Name:
                --------------------------------

           Title:
                 -------------------------------

           Date:
                --------------------------------


                                       1

<PAGE>   36

                                    EXHIBIT D

                         TENANT IMPROVEMENT WORK LETTER


               This Exhibit D is made to be a part of that certain Office Lease
between Salvio Pacheco Square, LLC, a California limited liability company
("Landlord"), and JCM Partners, LLC, a Delaware limited liability company
("Tenant"), dated as of February 20, 2001 (the "Lease"). To the extent there is
any inconsistency between the terms and provisions of the Lease and the terms
and provisions of this Exhibit D, this Exhibit D shall govern and control. All
capitalized words used herein which have defined meanings in the Lease shall
have the same defined meanings herein. Landlord and Tenant have agreed as
follows:

               1. TENANT ACCEPTS PREMISES IN "AS IS" CONDITION. As of the
Commencement Date, Landlord shall deliver possession of the Premises to Tenant,
and Tenant shall accept possession of the Premises in their "AS IS" condition.
Tenant acknowledges and agrees that Tenant and its representatives have
inspected the Premises and all of its structural and mechanical elements and
that Tenant is satisfied with the condition thereof. The Lease shall become
effective with respect to the Premises upon the Commencement Date. Except as
specifically provided below or in the Lease, Landlord has no obligation and has
made no promise to alter, remodel, improve, repair, decorate or paint the
Premises or any part of the Premises, or to pay for any such work, and neither
Landlord nor Landlord's agents have made any representations to Tenant with
respect to the condition of the Premises.

               2. CONSTRUCTION OF TENANT IMPROVEMENTS. Tenant shall
substantially complete any and all alterations of, or improvements to, the
Premises (the "Tenant Improvements"), in accordance with the Final Plans (as
defined below) submitted to and approved by Landlord. The Tenant Improvements
shall be made and performed in a safe and workmanlike manner, using only
first-class materials, in compliance with the minimum Building standard
specification for interior tenant improvements developed by Landlord for uniform
application in the Building, and in accordance with the provisions of the
following provisions of this Exhibit D:

               (a) No work with respect to the Tenant Improvements shall proceed
        without Landlord's reasonable prior written approval of:

                   (1) Tenant's contractor(s) and subcontractor(s);

                   (2) certificates of insurance furnished to Landlord from a
               company or companies approved by Landlord

                       (i) by Tenant's general contractor, evidencing commercial
                   general liability insurance (with contractual liability and
                   products and completed operations coverages) with a minimum
                   combined single limit for bodily injury and property damage
                   in an amount not less than Two Million Five Hundred Thousand
                   Dollars ($2,500,000) per occurrence, endorsed to name
                   Landlord, Landlord's managing agent and any other party
                   designated by Landlord as an additional insured, and workers'
                   compensation insurance, as required by law;

                       (ii) by any and all subcontractors, evidencing commercial
                   general liability insurance (with contractual liability and
                   products and completed operations coverages) with a minimum
                   combined single limit for bodily injury and property damage
                   in an amount not less than One Million Dollars ($1,000,000)
                   per occurrence, endorsed to name Landlord, Landlord's
                   managing agent and any other party designated by Landlord as
                   an additional insured, and workers' compensation insurance,
                   as required by law; and

                       (iii) by Tenant evidencing builder's risk insurance with
                   respect to the Tenant Improvements, in such amounts as are
                   deemed reasonable by Landlord, and workers' compensation
                   insurance, as required by law; and

                                       1
<PAGE>   37

                      (3) detailed plans and specifications for such work,
               prepared by a licensed architect approved in writing by Landlord
               (the "Tenant's Architect"), which indicate that such work will
               not exceed the design load capacities and performance criteria of
               the Building, including, without limitation, its electrical, HVAC
               and weight capacities, and construction means and methods.

               (b) Except as otherwise expressly provided herein, the Tenant
        Improvements shall be undertaken at Tenant's sole cost and expense and
        in strict conformance with all applicable laws, regulations, building
        codes and the requirements of any building permit and all other
        applicable permits or licenses issued with respect to such work. Tenant
        shall be solely responsible for obtaining all such permits and licenses
        from the appropriate governmental authorities, and any delay in
        obtaining such permits or licenses shall not be deemed to extend the
        Commencement Date or the Expiration Date of the Term of the Lease or to
        waive or toll Tenant's rental and other obligations with respect to the
        Premises. Copies of all permits and licenses shall be furnished to
        Landlord before any work is commenced, and any work not acceptable to
        any governmental authority or agency having or exercising jurisdiction
        over such work, or not reasonably satisfactory to Landlord, shall be
        promptly replaced and corrected at Tenant's expense.

               (c) Tenant shall provide Landlord with a construction schedule
        and all revisions thereto. All work by Tenant shall be scheduled through
        Landlord and shall be diligently and continuously pursued from the date
        of its commencement through its completion. Landlord hereby agrees to
        use its reasonable efforts to facilitate such work and to ensure access
        by Tenant to and availability to Tenant of all freight elevators and all
        such similar facilities necessary to facilitate such work, subject,
        however, to the rules and regulations established by Landlord for
        construction work in the Building. All work shall be conducted in a
        manner that maintains harmonious labor relations and does not
        unreasonably interfere with or delay any other work or activities being
        carried out by Landlord in the Building. Landlord or Landlord's agent
        shall have the right to enter the Premises and inspect the Premises and
        the Tenant Improvements at all reasonable times during the construction
        of the Tenant Improvements.

               (d) Tenant shall cause the Tenant's Architect to prepare and
        submit to Landlord for its approval complete architectural plans,
        drawings and specifications for all Tenant Improvements, including,
        without limitation, complete engineered mechanical and electrical
        working drawings for the Premises, showing the subdivision, layout,
        finish and decoration work desired by Tenant therefor, and any internal
        or external communications or special utility facilities which will
        require installation of conduits or other improvements within common
        areas, all in such form and in such detail as may be required by
        Landlord. Such complete plans, drawings and specifications are referred
        to herein as "Final Plans". Tenant shall submit the Final Plans for the
        approval of Landlord. Within seven (7) business days after Landlord
        receives the Final Plans for approval, Landlord shall give its written
        approval of the Final Plans, or provide Tenant with specific written
        objections to the Final Plans.

               If Landlord objects to the Final Plans, Landlord shall make
        itself available to meet with Tenant and the Tenant's Architect within
        five (5) business days after said objection to resolve the objections
        and to deliver to the Tenant's Architect such information as may be
        necessary to enable the Tenant's Architect to cause the Final Plans to
        be revised consistent with Landlord's objections. No delay in the
        scheduling of completion of the Tenant Improvements resulting from
        Landlord's review, revision and approval of the Final Plans shall be
        deemed to extend the Commencement Date or Expiration Date of the Term of
        the Lease or waive or toll Tenant's rental obligations with respect to
        the Premises. In the event that Tenant and/or its contractors and
        subcontractors desire to change the Final Plans subsequent to approval
        by Landlord, Tenant shall provide notice of such proposed change to
        Landlord for Landlord's written approval, which approval shall be
        required prior to the implementation of such proposed change. Landlord
        shall approve or disapprove the proposed change within five (5) business
        days after Landlord's receipt of all final plans and specifications
        therefor or within such time period after such five (5) business day
        period which is reasonably practical. At the conclusion of construction,
        Tenant shall cause the Tenant's Architect to provide two (2) complete
        sets of record drawings of the Tenant Improvements, as constructed,
        which shall not materially deviate from the Final Plans, and Tenant
        shall also cause to be provided a project closeout package, including,
        without limitation, a punchlist sign-off, project team list, permit
        cards, unconditional lien releases and final construction costs itemized
        by trade.


                                       2
<PAGE>   38

               (e) Landlord shall approve the list of bidding general
        contractors ("Bidding Contractors"). Tenant shall enter into a contract
        (the "General Contract") with one of the Bidding Contractors ("Tenant's
        Contractor") for the construction of the Tenant Improvements.

               (f) With respect to fire and life safety systems work required
        under the General Contract, Tenant shall cause Tenant's Contractor to
        solicit and review bids from at least three (3) subcontractors (the
        "Fire and Life Safety Bidders") from a list of contractors approved by
        Landlord and to enter into a subcontract with one of the Fire and Life
        Safety Bidders. With respect to all mechanical systems work required
        under the General Contract, Tenant shall cause Tenant's Contractor to
        solicit and review bids from at least three (3) subcontractors (the
        "Mechanical Bidders") from a list of contractors approved by Landlord
        and to enter into a subcontract with one of the Mechanical Bidders. With
        respect to all electrical systems work required under the General
        Contract, Tenant shall cause Tenant's Contractor to solicit and review
        bids from at least three (3) subcontractors for all such work (the
        "Electrical Bidders") from a list of contractors approved by Landlord
        and to enter into a subcontract with one of the Electrical Bidders. To
        the extent Tenant's Contractor desires to subcontract other work
        required under the General Contract, Tenant shall cause Tenant's
        Contractor to solicit bids for such proposed subcontract (the "Other
        Work Bidders"), at least one (1) of which, if Landlord so elects, shall
        be a subcontractor designated by Landlord, and, with the prior written
        notice to Landlord, to enter into such subcontract with one of the Other
        Work Bidders. Tenant's Contractor may engage such laborers and suppliers
        as it deems appropriate, subject to the provisions of subparagraph (g)
        below.

               (g) [Notwithstanding anything to the contrary contained herein,
        all major contractors' and subcontractors' contracts for the Tenant
        Improvements shall be union contracts, and Tenant shall use its
        commercially reasonable efforts to ensure that union labor is employed
        in connection with the design and construction of the Tenant
        Improvements.]

               (h) Tenant hereby designates Brian Rein, or any other person
        designated by Tenant from time to time, as its representative in
        connection with the design and construction of the Tenant Improvements,
        and Landlord shall be entitled to rely upon the decisions and agreements
        made by such representative as binding upon Tenant.

               (i) Although Landlord has the right to review, request revisions
        to and approve the Final Plans, Landlord's sole interest in doing so is
        to protect the Building and Landlord's interest in the Building, and
        Landlord is not in any way warranting or representing that Tenant's
        Final Plans are suitable for their intended use or comply with
        applicable laws and regulations. Landlord shall have no liability
        whatsoever in connection with Tenant's Final Plans, nor any
        responsibility for any omissions or errors contained therein.
        Accordingly, Tenant shall not rely upon Landlord's approval for any
        purpose other than for the purpose of acknowledging the consent of
        Landlord to proceed with the requested action, and Landlord shall incur
        no liability of any kind by reason of the granting of such approvals.

               (j) Nothing in this Exhibit D shall affect the obligations of
        Tenant under the Lease with respect to any alterations, additions and
        improvements within the Premises, including, without limitation, any
        obligation to obtain the prior written consent of Landlord in connection
        therewith.

               3. PAINT AND CARPET ALLOWANCE. Subject to the terms and
conditions of this Paragraph 3, Landlord shall reimburse Tenant up to a maximum
amount of thirty thousand Dollars ($30,000) for costs incurred by Tenant to
paint, install carpet or for other office improvements in the Premises (the
"Paint and Carpet Allowance"). Landlord shall reimburse Tenant for such costs up
to the Paint and Carpet Allowance upon completion of the work and presentation
by Tenant to Landlord of the following: copies of all the invoices from the
person performing the work or rendering the services or providing the materials;
evidence that Tenant has paid all such invoices; and such supporting
documentation as Landlord may reasonably require, including, without limitation,
identification of the work completed and/or material supplied, mechanic lien
releases and certificates of payment issued by the Tenant's Architect and
Tenant's designated representative. The Paint and Carpet Allowance must be
utilized by Tenant, if at all, prior to December 31, 2005. As of such date,
Tenant shall forfeit any remaining balance of the Paint and Carpet Allowance
that Tenant has not utilized pursuant to the terms of this Exhibit D. Tenant
shall bear the cost of any and all Tenant Improvements to the Premises in excess
of the Paint and Carpet Allowance.


                                       3
<PAGE>   39

               4. REIMBURSEMENT AND COMPENSATION. Tenant shall reimburse
Landlord for any and all reasonable out-of-pocket costs incurred by Landlord in
connection with the design and review of the Final Plans (including, without
limitation, any conceptual plans and/or working drawings related thereto) for
the Tenant Improvements, and Landlord shall be entitled to construction
management fee in connection with its supervision of the construction of the
Tenant Improvements and administration of the Paint and Carpet Allowance in an
amount equal to two and one-half percent (2.5%) of the cost of Tenant
Improvements. Landlord may obtain any reimbursement or compensation required
hereunder by deducting the amount of such reimbursement and/or compensation from
the Paint and Carpet Allowance.

               5. TENANT'S INDEMNITY. Tenant shall indemnify, defend and hold
Landlord harmless from and against any and all claims, liens, expenses, costs,
losses, fines, liabilities and/or damages (including, without limitation,
attorneys' fees and costs) arising out of or in any way connected with the
construction by Tenant of the Tenant Improvements, except to the extent caused
by the gross negligence or willful misconduct of Landlord or its employees,
contractors or agents. Tenant's liability insurance will be primary with respect
to Tenant's indemnity.

               6. NOTICE OF NONRESPONSIBLITY. Landlord shall have the right to
post in a conspicuous location on the Premises, as well as record within the
County of Contra Costa, Notice(s) of Nonresponsibility in connection with any
and all Tenant Improvements constructed by Tenant hereunder.

               7. MISCELLANEOUS.

                  (a) Landlord's Representative. Landlord has designated Cor
Stam as its sole representative with respect to the matters set forth in this
Work Letter, who, until further written notice to Tenant, shall have full
authority and responsibility to act on behalf of the Landlord as required in
this Work Letter.

                  (b) Tenant's Default. Notwithstanding any provision to the
contrary contained in this Work Letter or Lease, if a default by Tenant exists
under the Lease or this Work Letter or has occurred at any time on or before the
substantial completion of the Tenant Improvements, then in addition to all other
rights and remedies granted to Landlord pursuant to the Lease, Landlord shall
have the right to withhold payment of all or any portion of the Paint and Carpet
Allowance.

                  (c) Certificate of Occupancy. Tenant shall have no right to
occupy the Premises for the conduct of business unless and until a certificate
of occupancy or other governmental-required approval for occupancy for the
Premises has been issued by the appropriate governmental entity.

                  (d) Applicability of Work Letter. This Work Letter shall not
be deemed applicable to any additional space added to the original Premises at
any time or from time to time, whether by any options under the Lease or
otherwise, or to any portion of the original Premises or any additions thereto
in the event of damage or destruction of the Premises, condemnation of the
Premises, or renewal or extension of the initial term of the Lease, whether by
any options under the Lease or otherwise, unless expressly so provided in the
Lease or any amendment or supplement thereto.

                  (e) Execution in Conjunction with Lease. This Work Letter is
being executed in conjunction with the Lease and is subject to each and every
term and condition thereof, including, without limitation, the limitations of
Landlord's liability set forth therein.


                                       4
<PAGE>   40

               IN WITNESS WHEREOF, the undersigned have executed this Exhibit D
concurrently with the execution of the Lease.

JCM Partners, LLC                      SALVIO PACHECO SQUARE, LLC,
A Delaware limited liability company   a California limited liability company

                                       By: JCM Partners, LLC,
By:                                        a Delaware limited liability company
  -----------------------------------
Its:
    ---------------------------------
Date:                                  By:
     --------------------------------     -----------------------------------

                                       Its:
                                           ----------------------------------

                                       Date:
                                            ---------------------------------


                                       5
<PAGE>   41

                                    EXHIBIT E

                              RULES AND REGULATIONS

        The following rules and regulations shall apply, where applicable, to
the Premises, the Building, the parking garage (if any), the Project and the
appurtenances. Capitalized terms have the same meaning as defined in the Lease.

1.      Sidewalks, doorways, vestibules, halls, stairways and other similar
        areas shall not be obstructed by Tenant or used by Tenant for any
        purpose other than ingress and egress to and from the Premises. No
        rubbish, litter, trash, or material shall be placed, emptied, or thrown
        in those areas. At no time shall Tenant permit Tenant's employees to
        loiter in Common Areas or elsewhere about the Building.

2.      Plumbing fixtures and appliances shall be used only for the purposes for
        which designed, and no sweepings, rubbish, rags or other unsuitable
        material shall be thrown or placed in the fixtures or appliances. Damage
        resulting to fixtures or appliances by Tenant, its agents, employees or
        invitees, shall be paid for by Tenant, and Landlord shall not be
        responsible for the damage.

3.      No signs, advertisements or notices shall be painted or affixed to
        windows, doors or other parts of the Building, except those of such
        color, size, style and in such places as are first approved in writing
        by Landlord. All tenant identification and suite numbers at the entrance
        to the Premises shall be installed by Landlord, at Tenant's cost and
        expense, using the standard graphics for the Building. Except in
        connection with the hanging of lightweight pictures and wall
        decorations, no nails, hooks or screws shall be inserted into any part
        of the Premises or Building except by the Building maintenance
        personnel.

4.      Landlord may provide and maintain in the first floor (main lobby) of the
        Building an alphabetical directory board or other directory device
        listing tenants, and no other directory shall be permitted unless
        previously consented to by Landlord in writing.

5.      Tenant shall not place any lock(s) on any door in the Premises or
        Building without Landlord's prior written consent and Landlord shall
        have the right to retain at all times and to use keys to all locks
        within and into the Premises. A reasonable number of keys to the locks
        on the entry doors in the Premises shall be furnished by Landlord to
        Tenant at Tenant's cost, and Tenant shall not make any duplicate keys.
        All keys shall be returned to Landlord at the expiration or early
        termination of this Lease.

6.      All contractors, contractor's representatives and installation
        technicians performing work in the Building shall be subject to
        Landlord's prior approval and shall be required to comply with
        Landlord's standard rules, regulations, policies and procedures, which
        may be revised from time to time.

7.      Movement in or out of the Building of furniture or office equipment, or
        dispatch or receipt by Tenant of merchandise or materials requiring the
        use of elevators, stairways, lobby areas or loading dock areas, shall be
        restricted to hours designated by Landlord. Tenant shall obtain
        Landlord's prior approval by providing a detailed listing of the
        activity. If approved by Landlord, the activity shall be under the
        supervision of Landlord and performed in the manner required by
        Landlord. Tenant shall assume all risk for damage to articles moved and
        injury to any persons resulting from the activity. If equipment,
        property, or personnel of Landlord or of any other party is damaged or
        injured as a result of or in connection with the activity, Tenant shall
        be solely liable for any resulting damage or loss.

8.      Landlord shall have the right to approve the weight, size, or location
        of heavy equipment or articles in and about the Premises. Damage to the
        Building by the installation, maintenance, operation, existence or
        removal of Tenant's Property shall be repaired at Tenant's sole expense.

9.      Corridor doors, when not in use, shall be kept closed.

10.     Tenant shall not: (1) make or permit any improper, objectionable or
        unpleasant noises or odors in the Building, or otherwise interfere in
        any way with other tenants or persons having business with them; (2)


                                       1
<PAGE>   42

        solicit business or distribute, or cause to be distributed, in any
        portion of the Building, handbills, promotional materials or other
        advertising; or (3) conduct or permit other activities in the Building
        that might, in Landlord's sole opinion, constitute a nuisance.

11.     No animals, except those assisting handicapped persons, shall be brought
        into the Building or kept in or about the Premises.

12.     No inflammable, explosive or dangerous fluids or substances shall be
        used or kept by Tenant in the Premises, Building or about the Project.
        Tenant shall not, without Landlord's prior written consent, use, store,
        install, spill, remove, release or dispose of, within or about the
        Premises or any other portion of the Project, any asbestos-containing
        materials or any solid, liquid or gaseous material now or subsequently
        considered toxic or hazardous under the provisions of 42 U.S.C. Section
        9601 et seq. or any other applicable environmental law which may now or
        later be in effect. Tenant shall comply with all laws pertaining to and
        governing the use of these materials by Tenant, and shall remain solely
        liable for the costs of abatement and removal.

13.     Tenant shall not use or occupy the Premises in any manner or for any
        purpose which might injure the reputation or impair the present or
        future value of the Premises or the Building. Tenant shall not use, or
        permit any part of the Premises to be used, for lodging, sleeping or for
        any illegal purpose.

14.     Tenant shall not take any action which would violate Landlord's labor
        contracts or which would cause a work stoppage, picketing, labor
        disruption or dispute, or interfere with Landlord's or any other
        tenant's or occupant's business or with the rights and privileges of any
        person lawfully in the Building ("Labor Disruption"). Tenant shall take
        the actions necessary to resolve the Labor Disruption, and shall have
        pickets removed and, at the request of Landlord, immediately terminate
        any work in the Premises that gave rise to the Labor Disruption, until
        Landlord gives its written consent for the work to resume. Tenant shall
        have no claim for damages against Landlord, nor shall the Commencement
        Date of the Term be extended as a result of the above actions.

15.     Tenant shall not install, operate or maintain in the Premises or in any
        other area of the Building, electrical equipment that would overload the
        electrical system beyond its capacity for proper, efficient and safe
        operation as determined solely by Landlord. Tenant shall not furnish
        cooling or heating to the Premises, including, without limitation, the
        use of electronic or gas heating devices, without Landlord's prior
        written consent. Tenant shall not use more than its proportionate share
        of telephone lines and other telecommunication facilities available to
        service the Building.

16.     Tenant shall not operate or permit to be operated a coin or token
        operated vending machine or similar device (including, without
        limitation, telephones, lockers, toilets, scales, amusement devices and
        machines for sale of beverages, foods, candy, cigarettes and other
        goods), except for machines for the exclusive use of Tenant's employees,
        and then only if the operation does not violate the lease of any other
        tenant in the Building.

17.     Bicycles and other vehicles are not permitted inside the Building or on
        the walkways outside the Building, except in areas designated by
        Landlord.

18.     Landlord may from time to time adopt systems and procedures for the
        security and safety of the Building, its occupants, entry, use and
        contents. Tenant, its agents, employees, contractors, guests and
        invitees shall comply with Landlord's systems and procedures.

19.     Landlord shall have the right to prohibit the use of the name of the
        Building or any other publicity by Tenant that in Landlord's sole
        opinion may impair the reputation of the Building or its desirability.
        Upon written notice from Landlord, Tenant shall refrain from and
        discontinue such publicity immediately.

20.     Tenant shall not canvass, solicit or peddle in or about the Building or
        the Project.


                                       2
<PAGE>   43

21.     Neither Tenant nor its agents, employees, contractors, guests or
        invitees shall smoke or permit smoking in the Common Areas, unless the
        Common Areas have been declared a designated smoking area by Landlord,
        nor shall the above parties allow smoke from the Premises to emanate
        into the Common Areas or any other part of the Building. Landlord shall
        have the right to designate the Building (including the Premises) as a
        non-smoking building.

22.     Landlord shall have the right to designate and approve standard window
        coverings for the Premises and to establish rules to assure that the
        Building presents a uniform exterior appearance. Tenant shall ensure, to
        the extent reasonably practicable, that window coverings are closed on
        windows in the Premises while they are exposed to the direct rays of the
        sun.

23.     Deliveries to and from the Premises shall be made only at the times, in
        the areas and through the entrances and exits designated by Landlord.
        Tenant shall not make deliveries to or from the Premises in a manner
        that might interfere with the use by any other tenant of its premises or
        of the Common Areas, any pedestrian use, or any use which is
        inconsistent with good business practice.

24.     The work of cleaning personnel shall not be hindered by Tenant after
        5:30 P.M., and cleaning work may be done at any time when the offices
        are vacant. Windows, doors and fixtures may be cleaned at any time.
        Tenant shall provide adequate waste and rubbish receptacles to prevent
        unreasonable hardship to the cleaning service.


                                       3